Explaining the Capital Structure Strategy Model in Chemical and Food Industry Firms: A Mixed-Method Approach Based on the Paradigmatic Model
Keywords:
Competitive market conditions, government financial and economic policies, industryAbstract
Objective: This study aims to identify, empirically test, and explain the paradigmatic model of capital structure strategy in chemical and food industry firms listed on the Tehran Stock Exchange using an exploratory mixed-method approach.
Methodology: This applied research employed a sequential exploratory mixed-method design in three phases. First, a meta-synthesis of prior literature was conducted to extract determinants of capital structure, which were validated through expert consultation. Second, multivariate panel regression models were estimated separately for 46 listed firms (414 firm-year observations) over the period 2015–2023. Third, grounded theory methodology was applied through semi-structured interviews with financial experts, senior managers, and academics to develop a paradigmatic model of capital structure strategy.
Findings: The regression results indicate that explanatory variables account for 50% of the variation in capital structure in the chemical industry and 43% in the food industry. In the chemical sector, profitability and liquidity exert significant negative effects, while risk shows a positive effect on leverage. In contrast, in the food sector, profitability and inflation negatively affect leverage, whereas institutional ownership has a positive and significant impact. Furthermore, leverage negatively affects ROCE and ROE and positively influences the cost of capital in chemical firms. In food firms, debt-based financing positively affects ROCE and ROE but significantly reduces stock liquidity. The qualitative phase reveals that capital structure strategy is shaped by the interaction of causal conditions, contextual factors, intervening variables, strategic responses, and resulting outcomes within each industry.
Conclusion: The findings demonstrate that capital structure strategies in chemical and food industries are influenced not only by firm-level financial determinants but also by industry-specific characteristics, macroeconomic policies, competitive market conditions, and institutional environments; therefore, no universal capital structure model can be generalized across industries.
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Copyright (c) 2025 Azadeh Fakuri, Ebrahim Chirani, Seyyed Mozaffar Mirbarg Kar (Author)
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