Productivity and capital investments: Evidence from Tehran stock exchange (TSE)

Abstract

This study investigates the relationship between Productivity and Capital Investments and try to empirically investigate the factors seem to be related to capital investments. For this purpose, a sample consists of 70 firms accepted in TSE thorough 2001 to 2010 were examined. The results show that, aggregately, there is no substantial relation between Productivity and Capital Investments unless in the second model, which a weak relation exists. The findings show that the leverage characteristics of firms and financing the firm by debts, has a negative and significant effects on capital investments. Also, the variables as firm size, capital intensity and finished goods, have significant and positive relationship with capital investments.