[Home ] [Archive]   [ فارسی ]  
:: Volume 8, Issue 4 (fall 2013) ::
jme 2013, 8(4): 59-73 Back to browse issues page
The Impact of Leverage on Firm Investment: Evidence from Tehran Stock Exchange
Mohammad Eghbalnia , Mohammad Esmaeel Fadayinejad , Mohammad Noferesti
Abstract:   (2070 Views)

The impact of financial leverage on firm investment is one of the most important issues in corporate finance. Debt overhang reduces the incentives of shareholder–management coalition in controlling the firm to invest in positive net-present-value investment opportunities. On the other hand, firms without debt in their financial structure face with a new problem known as over-investment. This study uses regression analysis to survey the effects of financial leverage on investment decisions of TSE  firms between years 2001-2010. The results show that in contrary to previous findings in literature, when using total liabilities to total assets as the measure of leverage, there is no relationship between the two parameters and by using long term debt to total assets, we see a positive impact.

Keywords: Financial Leverage, Firm Investment, Growth Opportunities, Under-investment, Over-investment
Full-Text [PDF 342 kb]   (1303 Downloads)    
Type of Study: Research | Subject: Economics
Received: 2016/06/25 | Accepted: 2016/06/25 | Published: 2016/06/25
Add your comments about this article
Your username or Email:

CAPTCHA code


XML   Persian Abstract   Print


Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:

Eghbalnia M, Fadayinejad M E, Noferesti M. The Impact of Leverage on Firm Investment: Evidence from Tehran Stock Exchange . jme. 2013; 8 (4) :59-73
URL: http://jme.mbri.ac.ir/article-1-168-en.html


Volume 8, Issue 4 (fall 2013) Back to browse issues page
Journal of Money and Economy Journal of Money And Economy
Persian site map - English site map - Created in 0.07 seconds with 30 queries by YEKTAWEB 3764