The effect of stock market on the company’s investment in Iran (Price Informativeness Perspective)

Abstract

This study investigates the effect of stock market on the company's investment in Iran from the price informativeness perspective. The objective of this study is to explain the effect of the stock market performance, including corporate governance and informative roles, on the company’s investment in Iran using the price informativeness criterion; also to explain the effect of basic principles of the company on investment. This study is conducted using multivariate regression level model. The price informativeness is estimated using price synchronization combined with the transparency of information. The population in this study is companies listed in Tehran Stock Exchange during 2004 to 2011. Systematic elimination method is used to determine the samples, and finally, 77 companies are studied. The results of regression analysis are using analyzed different statistical tests, including t and f tests. The results indicate that the stock market performance has no effect on investment from the price informativeness perspective.