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Growing Science » Accounting » Investigating the relationship between financial distress and investment efficiency of companies listed on the Tehran Stock Exchange

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Accounting

ISSN 2369-7407 (Online) - ISSN 2369-7393 (Print)
Quarterly Publication
Volume 2 Issue 4 pp. 167-176 , 2016

Investigating the relationship between financial distress and investment efficiency of companies listed on the Tehran Stock Exchange Pages 167-176 Right click to download the paper Download PDF

Authors: Mehdi Vosoughi, Hojat Derakhshan, Mohammad Alipour

DOI: 10.5267/j.ac.2016.3.003

Keywords: Financial distress, Investment efficiency, Management ownership, Institutional ownership

Abstract: The present study is aimed at investigating the relationship between financial distress and investment efficiency of companies listed in the Tehran Stock Exchange (with emphasis on the role of ownership type). To calculate investment efficiency, the Richardson’s model (2006) [Richardson, S. (2006). Over-investment of free cash flow. Review of Accounting Studies, 11(2-3), 159-189.] was employed. The aim of the present study is applied and its method is correlational- ex post facto. Using the exclusion sampling method and by applying the conditions of selecting the sample, 94 companies were selected from 2008 to 2013. To test the research hypotheses, multiple regression was used. Findings of the research indicate that there was a correlation between financial distress and investment efficiency in companies listed in the Tehran Stock Exchange, and institutional ownership had positive effects on the relationship between financial distress and investment efficiency of companies listed in the Tehran Stock Exchange. Furthermore, management ownership had no effect on the relationship between financial distress and investment efficiency in companies listed in the Tehran Stock Exchange.

How to cite this paper
Vosoughi, M., Derakhshan, H & Alipour, M. (2016). Investigating the relationship between financial distress and investment efficiency of companies listed on the Tehran Stock Exchange.Accounting, 2(4), 167-176.

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Journal: Accounting | Year: 2016 | Volume: 2 | Issue: 4 | Views: 3179 | Reviews: 0

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