Open AccessSTUDY OF THE RELATIONSHIP BETWEEN OVERINVESTMENT, LEVERAGE, AND LIQUIDITY IN COMPANIES LISTED IN TEHRAN STOCK EXCHANGE
Author(s) -
Elahe Rostami khanghah,
Partovi Bamdad
Publication year - 2020
Publication title -
revista gênero and direito
Language(s) - English
Resource type - Journals
eISSN - 2179-7137
pISSN - 2177-0409
DOI - 10.22478/ufpb.2179-7137.2020v9n2.50822
Subject(s) - market liquidity , leverage (statistics) , stock exchange , business , panel data , capital structure , monetary economics , financial system , econometrics , finance , economics , debt , machine learning , computer science
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