The Effect of Oil Price Volatility on Investing Strategies of Companies Accepted in Tehran Stock Exchange

Today one of the main problems of oil-exporting countries is severe dependence on oil revenues. The existence of volatility of oil prices and the uncertainty which stems from it exacerbates the problem. Therefore, the investigation of the consequences of oil price volatility on different sectors of the economy, particularly the country's capital markets which represent growth of economic activities, is very important and vital. In this paper, we examine the effect of oil price volatility on investing strategies. Our sample is the listed companies in Tehran Stock Exchange during the period 1379 to 1389. To measure the impact of oil price volatility on investment strategies, GMM (Generalized moment method) is used. Empirical results showed that there is a U shaped relationship between oil price volatility and firm investment.