Investigating the effect of debt level selection and debt maturity on investment behavior of companies listed on the Tehran Stock Exchange

Abstract

Investment is a process in which the right facilities are used to generate profitability. In this regard, the combination of capital structure and its relationship with shareholder wealth is important. The most important about capital structure is to determine the optimal ratio for the amount of debt to stocks because it directly affects the value of the company. The choice between the amount of capital used or the debt depends on various factors, including the influence of the capital structure based on internal factors, to increase the value of the company. Unlike previous researches done, the present is holistic study. The purpose of this study is to investigate the effect of debt levels and debt maturities on the investment behaviour of active companies listed on the Tehran Stock Exchange during the period 2011-2018. In this study, regression model using panel data has been used to investigate this effect. The results of this study indicate that debt levels and debt maturity have a negative significant effect on corporate investment behaviour, which indicates that debt maturity and debt levels are considered as a factor that limits the company's excessive investment. The results also show that companies with high debt will probably not be able to take advantage of their future opportunities.

Keywords

• debt levels
• debt maturity
• investment behavior