Review of the Relationship between Investment and Stock Liquidity Level of Companies Listed in Tehran Stock Exchange (With Emphasis on Industry Type)

Abstract

The purpose of this research is to review the effect of stock liquidity on the level of investment in companies listed in Tehran stock exchange in 2006-2011 time period. A number of 168 companies were reviewed in mentioned time period in order to perform this research. Pooled regression model and Wald test were used in Eviews 6 to test the research assumptions. In this research, industry-based adjusted trading volume was used to specify the liquidity of stocks. Dependent variable is the level of future investments that for calculating it 3 standards were used: growth of total assets, growth of fixed assets, and growth of inventory. Moreover, financial leverage, Q-tobin ratio, cash amount, and industry type have been used as control variables.The research findings indicate that the impact of industry-based adjusted trading volume on future growth of total inventory, is negative and significant. Other results indicate that the impact of Q-tobin ratio on future growth of total assets and future growth of total fixed assets, is positive and significant.

Keywords: investment, growth of total assets, growth of fixed assets, inventory growth, liquidity.