Planning and Budgeting

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For the first time in the country, this research employs microeconomic fundamentals in a try to estimate and assess the factors that affect the liquidity in production enterprises. For this purpose, the enterprises' demand for money function were estimated with the data related to 161 production enterprises accepted to Tehran Stock Exchange within the 2000-2010 period including the third and fourth five-year development plans of Iran. The empirical results of balanced panel data method indicate the economies of scale in the real demand for money at the level of production enterprises. Meanwhile, more real money balances are kept in the enterprises that have undergone more wage costs. Additionally, estimates illustrate that if the ‘access to banking resources indicator’ is introduced to the demand for money function, less real money balances are kept in the enterprises that have more access to the banking resources. It should be added that estimates of interest rate coefficients indicate that the average weight pertaining to the interest rate of deposit accounts as well as that of the banking facilities are not statistically significant variables for substituting with money opportunity cost in this research therefore, some other variables are needed for developing the model of the study in order to analyze the impact of monetary policy on the liquidity behavior of the production enterprises.

Keywords: Demand for Money, Interest Rate, Monetary Policy, Enterprise Behavior, Panel Data

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