Rahhaneh Salehi - BSc. of Finance, Islamic Azad University, North Tehran branch, the corresponding author

The economy destiny of any country is determined by the investments made in it. But keep in mind, not every investment, in any quantity or quality, will lead us to development. The role of capital in the process of economic growth is fundamental because with the increase in population and labor force, the need for capital and productive investment on core businesses is inevitable. Evolution of financial markets has been coincided with the expansion of institutional ownership and prominence of corporate governance standards in developing countries. Sustained longstanding economic development requires well-organized allocation of resources at the nationwide economy level and making efficient investment decisions. This paper strives to reveal the convexity of institutional blockholders and corporate investment decisions with an emphasis on the moderating role of financial constraints. The final sample is systematically selected from ۱۴۴ TSE-listed companies. This research is an applied and descriptive-correlative in terms of purpose and method, respectively. Multivariate ordinary regression is utilized to scrutinize connectivity of minded variables. The empirical results demonstrate a positive and significant convexity between ownership of institutional blockholders and investment on core business, acquisitions and R&D activities. Furthermore, financial constraints upset the construction. The empirical analysis advocates a complementary connotation between institutional blockholders and corporate cash flows. The fallouts can be implicated for optimal allocation of financial capitals, strengthening governance standards, and making sound investment decisions. It might also avert over-under investment.

Institutional blockholder, Corporate governance, Core Business, R&D, Financial constraints