Relationship between Financial Limitations and Investment Efficiency in Companies Listed on Tehran Stock Exchange

Shirin Khorshidzadeh Haghighi, Hassan Madrakian

Abstract


In this study, the relationship between financial limitations based on Kaplan-Zingales model (KZ) and investment efficiency is considered. Companies do not have the stability required for financing, having financial limitations due to various economic reasons. Therefore, given the mentioned limitations, it is necessary that investment behaviors and their efficiency be studied. Thus, this study aims to consider the relationship between financial limitations and investment efficiency in companies listed on Tehran Stock Exchange. The sample, consists of 79 companies listed on Tehran Stock Exchange between the years 2009 and 2013. Hypotheses were developed based on polyserial correlation, Durbin-Watson and F (Fisher) tests and multivariate linear regression. Independent variable of this study is financial limitations and dependent variable is investment efficiency (underinvestment, overinvestment). Results obtained from this study suggest a significant negative relationship between financial limitations and too low and overinvestment.


Keywords


financial limitations, investment efficiency, underinvestment, overinvestment.

Full Text:

PDF

Refbacks

  • There are currently no refbacks.