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Investment and Financing Constraints in Iran

Received: 10 August 2013     Published: 30 September 2013
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Abstract

Since the level of fixed investment is costly for firms, they always search for ways to maintain it; however, financing constraints prevent the realization of this goal. In this article, a panel of over 134 stock firms over the period 2005-2011 was used to study the linkages between investment in fixed and working capital and financing constraints. To this end we have analyzed the relation between investment, cash flow, tangible fixed assets, working capital, and fixed investment. The results obtained indicate that an active management of working capital may help firms alleviate the effects of financing constraints on fixed investment. Nevertheless, they did not examine the input of working capital management of the company.

Published in International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 5)
DOI 10.11648/j.ijefm.20130105.17
Page(s) 252-257
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2013. Published by Science Publishing Group

Keywords

Investment, Cash Flow, Tangible Fixed Assets, Fixed Investment, Working Capital Management

References
[1] Sai, D., Alessandra, G., John, K., 2012. Investment and financing constraints in china, Journal of banking $ Finance 18, 1-18.
[2] Allen, F., Qian,J., Qian, M., 2005. Law, finance,and economic growth in China, Journal of Financial Economics 77, 57–116.
[3] Ayyagari, M., Demirgüç-Kunt, A., Maksimovic, V., 2010, Formal versus informal Finance: evidence from China.Review of Financial Studies 23, 3048–3097.
[4] Chen, H., Chen, S., 2012, Investment – cash flow sensitivity cannot be a good Measure of financial constraints: evidence from time-series. Journal of Financial Economics 103, 393–410.
[5] Guariglia, A., Liu, X., Song, L., 2011, internal finance and growth: microeconometric Evidence on Chinese firms, Journal of Development Economics 96 (1), 79–94.
[6] Bernanke, B., Gurkanyan, R., 2001. Is Growth Exogenous? Taking Mankiw, Romer, and Weil Seriously, National Bureau of Economic Research Annual, MIT Press, and Cambridge, Massachusetts.
[7] Bond, S., Schiantarelli, F., 2010, Capital accumulation and growth: a new look at Empirical evidence, Journal of Applied Econometrics 25, 1073–1099.
[8] Ding, S., Knight, J., 2011, why has China grown so fast?"The role of physical and human capital formation, Oxford Bulletin of Economics and Statistics 73, 141–174.
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  • APA Style

    Hossein Hossein, Fatemeh Baghiyan. (2013). Investment and Financing Constraints in Iran. International Journal of Economics, Finance and Management Sciences, 1(5), 252-257. https://doi.org/10.11648/j.ijefm.20130105.17

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    ACS Style

    Hossein Hossein; Fatemeh Baghiyan. Investment and Financing Constraints in Iran. Int. J. Econ. Finance Manag. Sci. 2013, 1(5), 252-257. doi: 10.11648/j.ijefm.20130105.17

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    AMA Style

    Hossein Hossein, Fatemeh Baghiyan. Investment and Financing Constraints in Iran. Int J Econ Finance Manag Sci. 2013;1(5):252-257. doi: 10.11648/j.ijefm.20130105.17

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  • @article{10.11648/j.ijefm.20130105.17,
      author = {Hossein Hossein and Fatemeh Baghiyan},
      title = {Investment and Financing Constraints in Iran},
      journal = {International Journal of Economics, Finance and Management Sciences},
      volume = {1},
      number = {5},
      pages = {252-257},
      doi = {10.11648/j.ijefm.20130105.17},
      url = {https://doi.org/10.11648/j.ijefm.20130105.17},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130105.17},
      abstract = {Since the level of fixed investment is costly for firms, they always search for ways to maintain it; however, financing constraints prevent the realization of this goal. In this article, a panel of over 134 stock firms over the period 2005-2011 was used to study the linkages between investment in fixed and working capital and financing constraints. To this end we have analyzed the relation between investment, cash flow, tangible fixed assets, working capital, and fixed investment. The results obtained indicate that an active management of working capital may help firms alleviate the effects of financing constraints on fixed investment. Nevertheless, they did not examine the input of working capital management of the company.},
     year = {2013}
    }
    

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  • TY  - JOUR
    T1  - Investment and Financing Constraints in Iran
    AU  - Hossein Hossein
    AU  - Fatemeh Baghiyan
    Y1  - 2013/09/30
    PY  - 2013
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    DO  - 10.11648/j.ijefm.20130105.17
    T2  - International Journal of Economics, Finance and Management Sciences
    JF  - International Journal of Economics, Finance and Management Sciences
    JO  - International Journal of Economics, Finance and Management Sciences
    SP  - 252
    EP  - 257
    PB  - Science Publishing Group
    SN  - 2326-9561
    UR  - https://doi.org/10.11648/j.ijefm.20130105.17
    AB  - Since the level of fixed investment is costly for firms, they always search for ways to maintain it; however, financing constraints prevent the realization of this goal. In this article, a panel of over 134 stock firms over the period 2005-2011 was used to study the linkages between investment in fixed and working capital and financing constraints. To this end we have analyzed the relation between investment, cash flow, tangible fixed assets, working capital, and fixed investment. The results obtained indicate that an active management of working capital may help firms alleviate the effects of financing constraints on fixed investment. Nevertheless, they did not examine the input of working capital management of the company.
    VL  - 1
    IS  - 5
    ER  - 

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Author Information
  • Department of accountancy, Azad University of Gazvin, Gazvin baragin, Iran

  • Department of accountancy, Azad University of Gazvin, Gazvin baragin, Iran

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