Analyzing the Impact of Debt Maturity and Financial Reporting Quality on Under-Over Investment

This research analyzed the impact of debt maturity and financial reporting quality on under-over investment. Investment inefficiency (under-over) is measured based on the model presented by Biddle et al (2009) and financial reporting quality is measured based on the model presented by Dechow & Dichev (2002). The research sample includes 219 companies listed in Tehran Securities and Exchange over the period 2010 - 2014. Results showed that financial reporting quality and short debt maturity have significant and negative impact on Investment inefficiency. These analyzing also have done in two categories such as over investment observations and under investment observations. Results suggested that financial reporting quality has significantly negative impact on over investment, but no impact on under investment. Short term debt maturity has no significant impact on over investment and under investment. Other results showed operational cash flow, tangibility and volatility in operational cash flow have significant and positive impact on over investment; sales volatility has significant and negative impact on over investment. But age, growth opportunity, loss and size have no significant impact on over investment. Also, size has significant and positive impact on under investment; growth opportunity and tangibility have significant and negative impact on under investment. But age, operational cash flow, loss, sales volatility and volatility in operational cash flow have no significant impact on under investment