Abstract:
This research attempts to investigate the effect of financial constraints and different
levels of agency costs on the investment efficiency of companies in Iran. Following
the design of the financial risk assessment indexes, the transaction information
was collected from the Stock Exchange in the five-year period of 2011-
2015. The statistical sample consists of 128 companies selected by sampling
method based on Cochran formula in which totally obtained 640 year-firm data.
Linear regression and correlation were used to investigate the hypotheses of the
research. Also Eviews software was used to analyse the data and test the hypotheses.
What is summarized in the overall conclusion of the research hypothesis test
is that financial constraints are effective on investment performance based on the
indicators (kz) and (ww), as well as the various levels of agency costs, including
high and low agency costs effect on investment efficiency.
Machine summary:
As a result, this study examines the effect of financial constraints and the different levels of agency costs on the investment performance of listed companies in Tehran Stock Exchange.
Given the theoretical foundations and the researches presented in this re- gard, the following hypotheses are developed: First main hypothesis: Financial constraints affect the efficiency of investment.
While the convergence hypothesis of interests states that the interests of the major institutional investors are in line with the interests of management and this can encourage managers to make non-optimal decisions; according to theoreti- cal foundations and researches presented in this regard, the following hypotheses are formulated: Second main hypothesis: Agency costs are effective on investment efficiency.
Table 5: Estimating the model coefficients of the first sub-hypothesis (View the image of this page) And the coefficient estimated by the software for the index variable (kz) for the financial constraint is equal to 0.
(View the image of this page) The results of the estimation show that the probability of the t-statistic for the constant coefficient and the coefficients of the variable of financial constraints is less than 5% based on the index (ww) (0.
Table 6: Estimating the model coefficients of the second sub-hypothesis (View the image of this page) And the coefficient estimated by the software for the variable of financial constraints based on the index (ww) is 0.
According to the results of the first sub-hypothesis, high agency costs are effective on investment efficiency.
According to the results of the second sub-hypothesis, low agency costs are effective on investment efficiency.