1 Department of Economic Payame Noor University. IR.of Iran

2 Department of Accounting Payame Noor University. IR. of Iran


The goal of this study is to investigate the effect of stock offering (concentrated on stock price) on private investment during 1989-2012. The differentiation of the present study to other studies is using the total stock price index in exchange to assess stock offering and the volume of transactions in exchange. To do this, we have used self explanatory econometrics model with widespread intervals (ADRL) to evaluate the relations among variables. The results showed that stock offering has a negative significant effect on the private investment which is inconsistent with theoretical issues, as the stock price (value) increases, high liquidity lead to inappropriate allocation and sources loss in negative NPV projects, capital waste and ultimately decrease private enterprising. Moreover, a large volume of transactions in exchange market relate to firms and enterprising funds which are not secured through public savings , directly monitor stock activities, although they appear private, but investigating in their nature shows that they are public enterprises. Though, retail or public stockholders are much, but have low transactions volume and fewer maneuvers.  Therefore, exclusiveness and publicity of stock firms, limited activity in exchange market as well are regarded other reasons of this variable negative effect on the private investment.


Baker, M., Stein, J., Wurgler, J (2003). When Does the Market Matter? Stock Prices and the Investment of Equity-Dependent Firms.

Barro, R.J (1990). The stock Market & Investment, The Review Of Financial Studies, 2(1): 115-131.

Bekaert, G., Harvey, C (2000). Foreign Speculators & Emerging Equity Markets, Journal Of Finance 55: 565-613.

Blanchard, O., C. Rhee., Summers, L (1993). The Stock Market, Profit and Investment. Quarterly Journal of Economics, 108(1):115–36.

Chirinko, R., Schaller, H (2001), Business Fixed Investment and Bubbles: The Japanese Case, American.

Dollarr, D., Wei, S (2006).  Das (Wasted) Kapital: firm ownership and investment efficiency in CHINA. , IMF Working Paper, wp/06/9, P.3.

Gilchrist, S., Himmelberg, C., Huberman, G (2005). Do Stock Price Bubbles Influence Corporate Investment? Journal of Monetary Economics, 52:805–27.

Henry, P.B (2000). Do Stock Market Liberalization Cause Investment Booms”, Forthcoming, Journal of Financial Economics, 1-53.

Jafari samimi, A., Yahyazade far, M., Khansari, A (2004), studying the relation between stock issuance and private investment in Iran, Commerce bulletin journal, num 33.

Jensen, M.C (2005). Agency Costs of Overvalued Equity. Working Paper No. 04-26, Harvard NOM; Finance Working Paper No. 39/2004, ECGI, available at

Keshavarzian Payvastei, A (2002), Estimation Of Investment Private Industry of Iran, Barnameh V Budjeh Quarterly Magazine, No. 11, Tehran, In perison.

Kim, E.H., Singal, V (2000), Stock Market openings: Experience Of Emerging Economies. Journal Of Business, 73: 25-66.

Morck, R., Shleifer, A., Vishny, R (1990). The Stock Market and Investment: Is the Market a Sideshow? Brookings Papers on Economic Activity, 2:157–215.

Panageas, S (2005). The Neoclassical q Theory of Investment in Speculative Markets. Mimeo, The Wharton School, University of Pennsylvania.

Polk, C., Sapienza, P (2009). The Stock Market and Corporate Investment: A Test of Catering Theory, Journal of The Review of Financial Studies, 22(1):186-217.

Schumpeter, J.A (1912). The Theory of Economic Development, Translated University Press.

Stein, J (1996), Rational Capital Budgeting in an Irrational World, Journal of Business, 69:429–55.

Tadbir, E., Eghtesad research Institute. (2003), Iran economic evaluation with an approach to Heritage economic freedom index.

   Tak roosta, A., Aziz nejad, S., Mantegi, Kh. (2008), estimating the relation of stock issuance and institutional factors with private investment trough variance analysis method (1974-2004), economic bulletin, capital market special, num 2.

Teshkini, A (2005), Applied econometric by Microfit, Dibagaran cultural Institute, Tehran.

Zoghi, H (1988), “Explaining the feature and status of bonds in Iran economy”, Bank and monetary research institute, Central Bank, 1010.