Effects of Business Strategies on Investment Efficiency

Objective: Firm’s business strategy is an effective factor in investment efficiency and determining capital investment levels. Defender and prospector strategy as the strategy at the two edges of the business strategy spectrum proposed by Miles and Snow (1978) exposes firms at different levels of in...

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Autores principales:	Farrokh Barzide (Ph.D), Musa Javani Ghalandari, Abed Azimi
Formato:	article
Lenguaje:	FA
Publicado:	Shahid Bahonar University of Kerman 2019
Materias:	business strategies under-investment decision over–investment Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/7f98580cc479458d8b4bda8eb0219b5b
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spelling	oai:doaj.org-article:7f98580cc479458d8b4bda8eb0219b5b2021-11-04T19:54:23ZEffects of Business Strategies on Investment Efficiency2008-89142476-292X10.22103/jak.2018.11158.2532https://doaj.org/article/7f98580cc479458d8b4bda8eb0219b5b2019-02-01T00:00:00Zhttps://jak.uk.ac.ir/article_2183_8ea37b4fedd1adeedc21acbab008ff12.pdfhttps://doaj.org/toc/2008-8914https://doaj.org/toc/2476-292XObjective: Firm’s business strategy is an effective factor in investment efficiency and determining capital investment levels. Defender and prospector strategy as the strategy at the two edges of the business strategy spectrum proposed by Miles and Snow (1978) exposes firms at different levels of investment, monitoring, and management discretion, which have many implications for management investment decisions. The purpose of this study is to examine the effects of business strategy on firm’s investment efficiency Methods: Data of 119 companies listed in the Tehran stock exchange (TSE) in the period 2001 to 2015 has been obtained from Rahavard Novin news, financial statements and Codal Site of the TSE, and multinomial logistic regression model was used to test the research hypotheses. Results: Findings showed the firms that follow prospector and innovator strategy, invest in the highly risky projects and have higher probability for over-investment decisions. Whereas, the firms follow efficiency-oriented defender strategy are more likely to have under-investment decisions. Conclusion: In the firms following defender strategy, lower levels of managerial discretion, precise monitoring and fewer investment requirements lead to under-investment decisions. On the other hand, in the firms following prospector strategy, more managerial discretion, less stringent monitoring and massive investment requirements lead to over-investment decision.Farrokh Barzide (Ph.D)Musa Javani GhalandariAbed AzimiShahid Bahonar University of Kermanarticlebusiness strategiesunder-investment decisionover–investmentAccounting. BookkeepingHF5601-5689FAمجله دانش حسابداری, Vol 9, Iss 4, Pp 153-184 (2019)
institution	DOAJ
collection	DOAJ
language	FA
topic	business strategies under-investment decision over–investment Accounting. Bookkeeping HF5601-5689
spellingShingle	business strategies under-investment decision over–investment Accounting. Bookkeeping HF5601-5689 Farrokh Barzide (Ph.D) Musa Javani Ghalandari Abed Azimi Effects of Business Strategies on Investment Efficiency
description	Objective: Firm’s business strategy is an effective factor in investment efficiency and determining capital investment levels. Defender and prospector strategy as the strategy at the two edges of the business strategy spectrum proposed by Miles and Snow (1978) exposes firms at different levels of investment, monitoring, and management discretion, which have many implications for management investment decisions. The purpose of this study is to examine the effects of business strategy on firm’s investment efficiency Methods: Data of 119 companies listed in the Tehran stock exchange (TSE) in the period 2001 to 2015 has been obtained from Rahavard Novin news, financial statements and Codal Site of the TSE, and multinomial logistic regression model was used to test the research hypotheses. Results: Findings showed the firms that follow prospector and innovator strategy, invest in the highly risky projects and have higher probability for over-investment decisions. Whereas, the firms follow efficiency-oriented defender strategy are more likely to have under-investment decisions. Conclusion: In the firms following defender strategy, lower levels of managerial discretion, precise monitoring and fewer investment requirements lead to under-investment decisions. On the other hand, in the firms following prospector strategy, more managerial discretion, less stringent monitoring and massive investment requirements lead to over-investment decision.
format	article
author	Farrokh Barzide (Ph.D) Musa Javani Ghalandari Abed Azimi
author_facet	Farrokh Barzide (Ph.D) Musa Javani Ghalandari Abed Azimi
author_sort	Farrokh Barzide (Ph.D)
title	Effects of Business Strategies on Investment Efficiency
title_short	Effects of Business Strategies on Investment Efficiency
title_full	Effects of Business Strategies on Investment Efficiency
title_fullStr	Effects of Business Strategies on Investment Efficiency
title_full_unstemmed	Effects of Business Strategies on Investment Efficiency
title_sort	effects of business strategies on investment efficiency
publisher	Shahid Bahonar University of Kerman
publishDate	2019
url	https://doaj.org/article/7f98580cc479458d8b4bda8eb0219b5b
work_keys_str_mv	AT farrokhbarzidephd effectsofbusinessstrategiesoninvestmentefficiency AT musajavanighalandari effectsofbusinessstrategiesoninvestmentefficiency AT abedazimi effectsofbusinessstrategiesoninvestmentefficiency
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Effects of Business Strategies on Investment Efficiency

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