Examining the Effect of Capital Structure and Financing on the Technical Efficiency of Pharmaceutical Companies Listed on the Stock Exchange

This paper is composed of two main sections: the first section examines the relationship between capital structure and technical efficiency of 22 pharmaceutical companies listed on the Stock Exchange between 2006 and 2010. For this purpose، the property and debt ratios to evaluate capital structure and data envelopment analysis (input oriented CCR and BCC model) were used to detect technical efficiency using Win QSB 2. software. Additionally، Pearson correlation test was used to investigate the relationship between capital structure and Technical efficiency in 95% confidence level using SPSS software. In the second section، the Scale Efficiency of companies was computed by using BCC model and VRS approach. Moreover، the less efficient units were recognized by determining the absolute efficiency، and the reference group for each of them was specified. Although Pharmaceutical Companies of Iran Daro، Sina Daro، Pars Daro and Tehran Daro were the most effective companies in their industry based on DEA outputs، they are considered weak in terms of efficiency. The results of the study indicate that there is no significant relationship between capital structure and efficiency of pharmaceutical companies. Moreover، all these companies had low efficiency. This indicates that none of the companies had the optimal production volume.