Investigation Nonlinear Relationship between Investment on Fixed Assets and Performance of Companies Listed in Tehran Stock Exchange

The main objective of this study is to investigate nonlinear relationship between investment on fixed assets and performances of the companies listed in the Tehran Stock Exchange, TSE, in the 4- year-period of 1386 to 1390, regarding the differences among industries that arises from different amount of investments on fixedassets in different industries. The panel data model is used to test the research hypothesis. In this model, firm’s performance is viewed as the dependent variable, and investment on fixed assets along with control variables of firm size, capital structure, profitability, dividends and unemployment rates as independent variables.The findings indicated that there exists a non-linear relationship between capital intensity and firm’s performance in all the companies in the TSE, and that it is a U-shaped relationship in the non-metallic mineral industry and food industry that means there exists one point in which at a given level of investment on fixed assets, firm’s performance is at the minimum level. Also, the results indicated that the relationship for the chemical products industry is an inverted Ushaped one, where the optimal point shows the maximum performance of the firms at a given level of investment on fixed assets.