The Effect of Collateral Value on Investment: A Case Study of Iranian Industrial Plants

Please enable javascript in your browser.

Nikpour, Ali | 2025

0 Viewed

Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 58143 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Mahmoudzadeh, Amineh; Madanizadeh, Ali
Abstract:
This study investigates the collateral channel in the Iranian economy and presents key findings regarding the impact of collateral values on firms’ investment behavior. Introducing a novel measure of financial constraints, the research employs this variable to strengthen the empirical identification of the collateral channel. The results provide clear evidence for the existence of a collateral channel in Iran, particularly in investments related to construction and land acquisition. Firms facing tighter financial constraints exhibit a stronger propensity to invest in these areas when the value of real estate collateral increases. These findings support the presence of the collateral channel and highlight the mitigating effect of rising collateral values on firms’ financial constraints. Moreover, the effects of the collateral channel are significantly more pronounced among large firms, whereas no clear evidence is found among small firms
Keywords:
Collateral Type ; Financial Constraint ; Investment ; Investment Dynamics ; Collateral Value ; Manufacturing Establishments