Journal of Accounting and Management Vision

Journal of Accounting and Management Vision

Evaluating the Relationship between debt overhang and current performance of small and medium enterprises in the Iranian capital market

Document Type : Original Article

Authors
Seyedeh Elham Mirmohammadi 1
gholamreza soleimani amiri 2
1 Master of Accounting, Faculty of Social and Economic Sciences, Al-Zahra University, Tehran, Iran.
2 Associate Professor, Department of Accounting, Faculty of Social and Economic Sciences, Al-Zahra University, Tehran, Iran
Abstract
Recently, a significant increase in corporate debt has hampered economic growth in many countries. This raises concerns that create an obstacle to economic recovery. The present study examined whether debt overhang in small and medium-sized enterprises in Iran limits current performance. For this purpose, data related to 64 enterprises listed on the Tehran Stock Exchange for the years 1394 to 1398 (320 years - enterprise) were collected, which were in the category of small and medium-sized enterprises according to the research criteria. To evaluate the econometric model of the research examined in the form of a composite data model (panel), EViews and STATA software and the probit regression model were used. The results showed that the debt overhang in the previous year has been a significant negative impact on the employment rate this year. The enterprises with debt overhang also face more financial stress. The results also indicated that the amount of debt overhang has no effect on the amount of investment in fixed assets.
Keywords
Debt overhang
Current performance
Financial stress index
Small and medium-sized Enterprises
Financing