Investigating the Impact of Financial Reporting Quality and Debt Maturity on the Investment Efficiency in the Companies Listed in Tehran Stock Exchange

Under neo-classical theory, firms invest until the marginal benefit equals the marginal cost of this investment in order to maximize their values. However, in the Keynesian framework, where expected investment is determined by the preference for growth or financial security, and in the agency framework, which considers information asymmetry problems, firms may deviate from their optimal investment levels and hence suffer from underinvestment or overinvestment. This study, examines the role of financial reporting quality and debt maturity in investment efficiency. The sample of this study includes 100 companies listed in Tehran's Stock Exchange during the period 2009–2013, and Estimated Generalized Least Squares (EGLS) method is used for processing and testing the hypotheses. The results show that financial reporting quality improves investment efficiency. Also, there is no significant relationship between debt maturity and investment efficiency.