mahdi salehi; mohammad reza abbas zadeh; mostafa zangiabadi; elahe khodamoradi
Abstract
Introduction
As the largest amount of capital around the world is traded through stock markets, and the national economy is heavily influenced by these markets performance, the increase in listed company’s investment volume affects the development and improvement of company performance and so, it ...
Read More
Introduction
As the largest amount of capital around the world is traded through stock markets, and the national economy is heavily influenced by these markets performance, the increase in listed company’s investment volume affects the development and improvement of company performance and so, it will attract more capital towards the capital market and improve the economic situation. On the other hand, given the important role of foreign direct investment (the index of financial liberalization) in the economy of each country, most countries try to attract this capital. In fact, the global market for attracting these funds is highly competitive. This competition is particularly high among developing countries due to the need for rapid access to development and a lack of funds. Such countries seek to attract different types of capital, and they make various arrangements to attract these types of funds.
Theoretical framework
The liberalization of capital flows drives capital flows from high-capital to low-capital economies. These capital flows should complete domestic savings in low-capitalization countries and lead to increased investment in these countries. Capital flows can improve technology. There are indirect ways through which financial liberalization can improve the economic growth of countries. Financial liberalization, with transferring capital between countries, can help improve investment by increasing financial sector development. According to existing theories about the effect of financial liberalization on consumption, since consumers are often risk averse, they use financial markets to reduce investment risk, which will increase the likelihood of investing in companies accepted in financial markets. Therefore, the study of macroeconomic factors facilitating the investment process in listed companies at the stock exchange will be an issue.
Methodology
In this study, the impact of financial liberalization on the investment rate of listed companies on the Tehran Stock Exchange and Iran Over the Counter Market was evaluated and due to the lack of consensus among previous researches on how to measure the concept of financial liberalization, In this study, three measures such as potential financial liberalization (Heritage index), financial liberalization index (Reverse of difference between US real interest rate and Iranian real interest rate) and interest rate control (interest rate changes) were used to measure financial liberalization and its effect on the amount of corporate investment (net amount of operational activity investment class in the audited annual cash flow statement disclosed in each company) in the period 2002-2015 in companies listed at Stock Exchange using the structural equation approach, was measured.
Results & Discussion
The results indicate a significant positive relationship between financial liberalization and investment. In other words, with the liberalization of finance and the facilitation of foreign capital inflows, the reduction of capital costs and financing, companies have more resources to develop and complete their own operational projects and face easier conditions to Access these resources. Therefore, the company's management investing interest will increase and use cheaper resources than before liberalization. The results of this study are consistent with the findings of the study: Henry (2000); Hermes et al., (2005); Forbes & Warnock (2012) and Jadiyappa et al., (2016) are consistent.The results also show that the direct relationship between the interest rate changes and the financial liberalization index (Reverse of difference between US real interest rate and Iranian real interest rate) with the investment rate is negative.
Conclusions & Suggestions
The results also show that the direct relationship between the interest rate changes and the financial liberalization index (Reverse of difference between US real interest rate and Iranian real interest rate) with the investment rate is negative. In other words, there is a trade-off between interest rate and private equity investment, Therefore, the reduction of interest rate increases investment, so, financial sector policies that affect the long-term interest rate as well as the growth and development of money markets improve the productivity of the capitalized. increase savings and increase the present value of the profitability of investment projects. Therefore, it is suggested that in future research, in addition to those factors mentioned in the present study, the factors affecting financial liberalization will be identified in order to formulate the final model of financial liberalization measurement.
mahmoud lari; Mahdi Salehi; Alireza Shafiebeyk Mohammadi
Abstract
Abstract
Purpose – Economic survival in current interntational and even domestic markets is heavily dependent on competition with fierce competitiors. Consistent with this view, business enteties can not survive as a going concern unless they consider profitability and wealth creation as key and premier ...
Read More
Abstract
Purpose – Economic survival in current interntational and even domestic markets is heavily dependent on competition with fierce competitiors. Consistent with this view, business enteties can not survive as a going concern unless they consider profitability and wealth creation as key and premier organizational factors and accordingly hold themselves accountable for meeting their clients’ demands and expectations. In this regard, the establishment of a system comprised of operational dos and don’ts within different organizational functions, particularly financial department, should do the trick. The aforementioned operational requirements are currently being imposed by large firms for supply chain firms. Therefore, the present paper aims to investigate the effect of financial requirements of supply chain firms imposed by Iran Khodro Industerial Group (also known as IKCO) on the profitability of automotive component suppliers.
Design/Methodology/approach – The authors examine their hypotheses by performing KS test and using t statistic on a sample of 24 observations druing 2008-2009. The time frame is chosen based on the fact that the IKCO implemented its financial requirements from the 2008 onwards. Indeed, the paper utilizes the profitability information of automotive component suppliers both pre and post implementation periods.
Findings – After analyzing the IKCO financial requirements (e.g. financial unit obligation to participate in investement feasibility studies, financial unit obligation to design and implement quality costing system and logistic costing system; management and employees obligation to propose alternative approaches to meet target costing objectives, financial unit obligation to participate in cost management activities in line with target costing, financial unit obligataion to prepare and monitor financial ratio reports and also take necessary follow-up actions; the automotive component manufacturers obligation to establish and control cost budgeting system and also prepare cost deviation reports on a periodic basis, the automotive component manufacturers obligation to establish automated integral financial system calculating cost of goods sold (CGS) and prepare necessary reports in order to enhance the CGS), our findings indicate that the IKCO financial requirements not only meet the qualitative needs of the IKCO, but also increase the profitability of automotive component manufacturers.
Research limitations/implications – The present study is subject to following limitations. First, the obstinate refusal of automotive component manufacturers to provide detailed information about projects on the improvement of operational and supporting processes. Second, the unwillingness of automotive component manufactures to contribute to studies concerning the financial affairs of business entities.
Originality/value – The authors’ research contributes to current accounting literature by providing empirical evidence regarding a positive relationship between financial requirements and the profitability of supply chain firms.
Mahdii Salehi; Mohammad Donyaei
Abstract
The stakeholders' culture developing is one of the key factors influencing in the
development of capital markets and is one of the economic developments symbols.
Current survey, is measured the institutional investors and OTC brokers attitudes
about the variables affecting stakeholders culture developing.
This ...
Read More
The stakeholders' culture developing is one of the key factors influencing in the
development of capital markets and is one of the economic developments symbols.
Current survey, is measured the institutional investors and OTC brokers attitudes
about the variables affecting stakeholders culture developing.
This research is a descriptive survey that a census by making use of a researcher
made questionnaire that its validity was confirmed and its reliability with Cronbach's
alpha coefficient was obtained 0.87, analyzed institutional investors and OTC
brokers attitudes by Minitab and SPSS softwares, using the Kolmogorov-Smirnov
test (KS), One-sample Wilcoxon test, Mann-Whitney test (U) and the Kruskal-
Wallis test (H).
Results reveal that the OTC market's trading transparency, costs and supportive and
training mechanisms for investors and companies is appropriate. Furthermore, Iran's
OTC market providing innovation and diversification trading opportunities for
investors and decrease their risk to invest and participate in the capital market. Also,
there is no significant difference between institutional investors and brokers visions
on the examined variables. But, in aspects of educational levels, in all variables andaspects of the activity field, except the transactions transparency, is confirmed this
different perspectives.
