Relationships between Corporate Governance and Debt Cost Using SPSS Software: the case of Tehran Stock Exchange in Iran

The purpose of this paper is to examine the relationships between corporate governance and debt cost of the listed companies on the Tehran Stock Exchange (TSE) in Iran. Validated measurement items for study variables were adopted from previous studies. Data were gathered from the audited financial statements of the firms provided by TSE’s website from 2010 to 2015. According to the results, board non-executive members had significant effects on informational communication satisfaction. All dimensions of corporate governance (board non-executive members, institutional shareholders; CEO duality) were significantly related to debt cost. Both dimensions of corporate governance (controlling shareholders and board size) were not significantly related to debt cost. Previous studies have generally considered corporate governance as a two-dimensional construct. This study extends the literature by conceptualizing corporate governance based on five dimensions (board non-executive members, institutional shareholders; CEO duality, controlling shareholders and board size). No study has taken into consideration five dimensions of corporate governance in an Asian context. In addition, few studies have investigated the relationships between corporate governance and debt cost.