Relationship between investment opportunities and firm performance according to corporate life cycle: evidence from Tehran Stock Exchange

The aim of this paper is to review the relationship between investment opportunities and firm performance according to corporate life cycle. To test the research hypothesis, a sample of 40 companies listed in Tehran Stock Exchange over the period 2008-2012 based on panel method was taken. In these models, the presence or absence of effects models (fixed or random) is reviewed and finally the best model is estimated. Inference is based on significant level or p-value, thus likely that any value or significance level of the test is less than 0/05 is rejected at the 95 percent confidence level. The results indicate that the investment opportunities has relationship with firm performance for firms in decline but has no relationship with firm performance for firms in growth.