STUDY OF THE RELATIONSHIP BETWEEN OVERINVESTMENT, LEVERAGE, AND LIQUIDITY IN COMPANIES LISTED IN TEHRAN STOCK EXCHANGE
DOI:
https://doi.org/10.22478/ufpb.2179-7137.2020v9n2.50822Palavras-chave:
the companies’ liquidity, leverage, overinvestment, financingResumo
This study was conducted aimed at examining the effect of companies’ liquidity and leverage on their overinvestment. Surplus liquidity can affect the financial behavior of companies and accompany them in generating overinvestment in projects. Likewise, the increase in capital of the companies can play a significant role in increasing their leverage. This study sought to answer two main questions: 1) what effect does companies’ leverage have on overinvestment in projects, and 2) what effect does companies’ liquidity have on the relationship between leverage and overinvestment? In this causal-comparative study, the analysis was performed on the basis of panel data and multiple linear regression. Data from 118 companies was collected during 2013-2017. Data analysis and hypothesis testing were performed using EXEL and EVIEWS software. According to the findings, there was a significant relationship between companies’ liquidity and leverage with overinvestment. In addition, the results indicated that companies’ liquidity had no effect on the relationship between leverage and overinvestment
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Referências
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Khurana, I.K., Moser, W.J., 2013. Institutional shareholders' investment horizons and tax avoidance. J. Am. Tax. Assoc. 35 (1), 111–134.
Li, W.L., Xie, G.L., Hao, J.Y., 2014. The empirical study on the influence of managerial over-confidence on overinvest behavior. J. Shanxi Finance Econ. Univ. 10, 76–86.
McGregor, J., 2016. Tim Cook, the interview: Running Apple ‘is sort of a lonely job’. Washington Post. https://www.washingtonpost.com/classic-apps/stepping-out-ofsteve-jobss-shadow-tim-cook-champions-the-promise-of-
Justiniano, A., Primiceri, G.E., Tambalotti, A., 2015. Credit supplyand the housing boom. Working Paper. National Bureau o Economic Research
Huiji, B. (2014). A Study on Leverage and Firm Investment: Chinese Evidence. Royal Institute of Technology (KTH), Master of Science Thesis, Program Economics of Innovation and Growth
Liu, Q., Pan, X., Tian, G.G., 2018. To what extent did the economic stimulus package influence bank lending and corporate investment decisions? Evidence from China. J. Bank. Finance 86 (Suppl.
Leary, M.T., 2009. Bank loan supply, lender choice, and corporate capital structure. J. Finance 64 (3), 1143---1185.
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Lyandres, E., and Zhdanov, A. (2015). Underinvestment or Overinvestment: the Effect of Financial Leverage on Investment. Working Paper, SSRN
Izadinia, Nasser; Rassaeian, Amir (2015). Investigating the Relationship between Leverage and Asset Liquidity in Tehran Stock Exchange, Quarterly Financial Accounting, Summer 2015, 16 (29); Pp. 1-4.
Taherabadi, Ali Asghar ؛ Yari, Javad (2016). Investigating the Impact of Investment Intensity on Leverage in Companies Listed in Tehran Stock Exchange, 4th International Conference on Economics, Management, Accounting with Value Creation Approach, Shiraz.
Dehghan Manshadi, Alireza; Nadiri, Mohammad (2017). The effect of Leverage and Liquidity on Earnings and Capital Management in Selected Commercial Banks in Tehran Securities Exchange, MSc Thesis, University of Tehran.
Fendereski, Havva; Fendereski, Ali (2015). Investigating the Relationship between Stock Liquidity and Leverage in Companies Listed in Tehran Stock Exchange, 4th International Conference on Accounting and Management and 1th Conference on Entrepreneurship and Open Innovation, Tehran.
Noravesh, Iraj; Yazdani, Sima (2014). The Impact of Leverage on Firm Investments in Tehran Stock Exchange. Financial Accounting Researches.
Almeida, H., Campello, M., Laranjeira, B., Weisbenner, S., 2012.Corporate debt maturity and the real effects of the 2007 creditcrisis. Crit. Finance Rev. 1 (1), 3---58.
Bates, T.W., 2005. Asset sales, investment opportunities, and theuse of proceeds. J. Finance 60 (1), 105---135.
Brown, R., Sarma, N., 2007. CEO overconfidence, CEO dominance and corporate acquisitions. J. Econ. Bus. 59 (5), 358–379.
Chen, S., Chen, X., Cheng, Q., Shevlin, T., 2010. Are family firms more tax aggressive than non-family firms? J. Financ. Econ. 95 (1), 41–61.
Feng, M., Ge, W., Luo, S., Shevlin, T., 2011. Why do CFOs become involved in material accounting manipulations? J. Account. Econ. 51 (1), 21–36.
Ferris, S.P., Jayaraman, N., Sabherwal, S., 2013. CEO overconfidence and international merger and acquisition activity. J. Financ Quant. Anal. 48 (01), 137–164.
Goel, A.M., Thakor, A.V., 2008. Overconfidence, CEO selection, and corporate governance. J. Finance 63 (6), 2737–2784.
14.
Hao, Y., Liu, X., Lin, C., 2005. An empirical research on the general managerial overconfidence and investment decision for the listed companies. Chin. J. Manag. Sci. 5, 142–148.
Jiang, F.X., Yin, Z.H., Su, F., Huang, L., 2009. Managerial background traits and corporate over-investment. Manage. World (1), 130–139.
Khurana, I.K., Moser, W.J., 2013. Institutional shareholders' investment horizons and tax avoidance. J. Am. Tax. Assoc. 35 (1), 111–134.
Li, W.L., Xie, G.L., Hao, J.Y., 2014. The empirical study on the influence of managerial over-confidence on overinvest behavior. J. Shanxi Finance Econ. Univ. 10, 76–86.
McGregor, J., 2016. Tim Cook, the interview: Running Apple ‘is sort of a lonely job’. Washington Post. https://www.washingtonpost.com/classic-apps/stepping-out-ofsteve-jobss-shadow-tim-cook-champions-the-promise-of-
Justiniano, A., Primiceri, G.E., Tambalotti, A., 2015. Credit supplyand the housing boom. Working Paper. National Bureau o Economic Research
Huiji, B. (2014). A Study on Leverage and Firm Investment: Chinese Evidence. Royal Institute of Technology (KTH), Master of Science Thesis, Program Economics of Innovation and Growth
Liu, Q., Pan, X., Tian, G.G., 2018. To what extent did the economic stimulus package influence bank lending and corporate investment decisions? Evidence from China. J. Bank. Finance 86 (Suppl.
Leary, M.T., 2009. Bank loan supply, lender choice, and corporate capital structure. J. Finance 64 (3), 1143---1185.
López-de-Foronda, Ó., López-de-Silanes, F., López-Iturriaga, F. J., & Santamaría-Mariscal, M. (2018). Overinvestment, leverage and financial system liquidity: A challenging approach. BRQ Business Research Quarterly.
Lyandres, E., and Zhdanov, A. (2015). Underinvestment or Overinvestment: the Effect of Financial Leverage on Investment. Working Paper, SSRN
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Publicado
2020-02-24
Como Citar
ROSTAMI KHANGHAH, E. .; PARTOVI, B. . STUDY OF THE RELATIONSHIP BETWEEN OVERINVESTMENT, LEVERAGE, AND LIQUIDITY IN COMPANIES LISTED IN TEHRAN STOCK EXCHANGE. Gênero & Direito, [S. l.], v. 9, n. 2, 2020. DOI: 10.22478/ufpb.2179-7137.2020v9n2.50822. Disponível em: https://periodicos.ufpb.br/ojs/index.php/ged/article/view/50822. Acesso em: 26 dez. 2024.
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