Investigation into the Effect of Stock Liquidity on Excess Financial Leverage Emphasizing the Moderating Role of Institutional Shareholders

The present study seeks to influence the impact of stock liquidity on the excess financial leverage emphasizing the moderating role of institutional shareholders. The scope of the study includes the firms listed in the Tehran Securities Exchange over 2012-2018, among which 202 firms were selected through systematic elimination and data was analyzed using a regression model. The present study is considered among applied research and is a correlation study. Desk research has been used to collect information and data while financial statements, explanatory notes, and the stock exchange monthly have been used to collect research data. Variance heterogeneity pre-tests, the F-Limer test, the Hausman test, and the Jarque-Bra test were used first to analyze data, and a multiple regression test was then used to confirm or reject the research hypothesis (Eviews software). Results indicated that stock liquidity has a significant influence on surplus financial leverage, while institutional ownership influenced the relationship between stock liquidity and surplus financial leverage significantly.