Factors Affecting Corporate Investment Decisions

In this final paper Troianova Natalia presents an analysis of the most significant factors in the investment behavior of large Russian enterprises. The period of study is dated from 2008 to 2014 and covers 93 public companies. The list of companies is based on the companies with first and second levels of stocks on the Moscow stock exchange. A regression analysis of unbalanced panel data is provided here. The sample of firms was collected in manual way from database «Ruslana» on the basis of corporate financial statements. In attempt to make the more accurate model it was decided to add three dummy variables in one of the regressing equations: 1) the level of the quotation; 2) the area of production; 3) federal and regional territorial level of enterprises’ location. Only two econometric models were valued. The results of the second model estimated with the use of fixed effects were the best ones. Nevertheless, both of them proved that the dependent variable of operating profit the model has positive relationship with the independent variable, which represents the sum of capital expenditures. However, according to the first model, which was firstly evaluated by pooled OLS and then using random effects, showed that dummies played no significant role in investment activity of large Russian corporations.