Study of the relationship between overinvestment, leverage, and liquidity in companies listed in tehran stock exchange
| Autor | Elahe Rostami khanghah - Bamdad Partovi |
| Cargo | M.A. student, Department of Financial Management, Abhar Branch, Islamic Azad University Abhar, Zanjan, Iran - Assistant Professor, Department of Economics, Abhar Branch, Islamic Azad University Abhar, Zanjan, Iran |
| Páginas | 558-572 |
Periódico do Núcleo de Estudos e Pesquisas sobre Gênero e Direito
Centro de Ciências Jurídicas - Universidade Federal da Paraíba
V. 9 - Nº 02 - Ano 2020
ISSN | 2179-7137 | http://periodicos.ufpb.br/ojs2/index.php/ged/index
558
STUDY OF THE RELATIONSHIP BETWEEN
OVERINVESTMENT, LEVERAGE, AND LIQUIDITY IN
COMPANIES LISTED IN TEHRAN STOCK EXCHANGE
Elahe Rostami khanghah1
Bamdad Partovi2
Abstract: 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
1M.A. student, Department of Financial Management, Abhar Branch, Islamic Azad
University Abhar, Zanjan, Iran.Email: elaherostami82@gmail.com.
2Assistant Professor, Department of Economics, Abhar Branch, Islamic Azad University
Abhar, Zanjan, Iran. Email: bamdad.partovi@yahoo.com.
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.
Keywords: the companies’ liquidity,
leverage, overinvestment, financing.
1. Introduction
The availability of financial
resources affects the companies’ capital.
A review of the literature suggests that
when companies’ financial conditions
are favorable, their capital increases
(Almeida, 2012). This can create
problems for companies, as high
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