The Relationship between Capital Structure and Firm Performance: The Moderating Role of Agency Cost

Since it first appeared, agency theory has argued that debt can decrease issues between agent and principal enhance the value of firms. This paper explores moderating effect cost on association capital structure firm performance. A panel econometric method, namely a fixed-effect regression model, was used to evaluate above description. investigation uses secondary data collected from published annual reports manufacturing firms listed Tehran Stock Exchange (TSE) during 2011–2019. Empirical results show is negatively related Agency also negative impact corporate performance; however, in case ROA EPS, relationship positive. Interestingly, findings illustrate increasing level reduce costs Moreover, robust correlations are revealing significantly affects These provide proof support assumptions theory, which explains performance study provides new perspectives by using Iran; hence, these insights developing market improve understanding Asian Middle Eastern markets.