The Effect of Financial Distress on the Investment Behavior of Companies Listed on Tehran Stock Exchange

Subject Areas : Financial Accounting

Roya Ahmadi ¹ , Hamidreza Kordloei ²

1 - Islamic Azad University Science and Research Branch of Tehran
2 - Islamic Azad University, Science and Research Branch of Tehran, Tehran, Iran

Received: 2018-05-10 Accepted : 2019-01-14 Published : 2018-12-01

Keywords: investment behavior, Financial Distress, investment opportunity,

Abstract :

The purpose of this study was to determine the effect of financial distress on investment behavior for the years of 2011 to 2016. The statistical population of the research is Tehran Stock Exchange. According to the systematic elimination method, 104 companies have been selected as the statistical sample. In this research, financial distress is independent variable and corporate investment behavior is dependent variable and investment opportunities is considered as interactive variable. The present research is an applied research and in terms of methodology is a correlational study. In this research, for collecting data and information, library method and in the research data section, financial statements, explanatory notes and monthly magazine of stock exchange, and in order to describe and print the data collected, descriptive and inferential statistics and to analyze the data, pre-test variance analysis, F-limmer test, Hausman test and Jarck-Bera test, and then multivariate regression test for confirmation and rejection of research hypotheses (EViews software) were used. The results showed that firms with less investment opportunities tend to be less likely to invest, in addition distressed financially firms with more investment opportunities are more likely to increase investment.

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