Özet:

The present study was aimed to investigate the effect of financial distress on investment efficiency with the moderating role of managerial and institutional ownership of companies listed on the Pakistan Stock Exchange. For current study, proportional allocation sampling technique is used under which 94 companies were selected as a sample for the study period of 2011-2015. To test the hypotheses, multiple regression was used in which this study has used fixed and random effect model. The Findings of the current study indicates that financial distress negatively effects the investment efficiency of the companies listed on Pakistan stock exchange, moreover the moderating role of institutional ownership increase the effect of financial distress on investment efficiency, whereas the moderating role of managerial ownership decrease effect of financial distress on investment efficiency. Hence, shareholders and investors should consider this issue and they should investigate the financial distress position and the degree of managerial ownership and institutional ownership at the time of investment in companies. Key words: Financial Distress, Investment Efficiency, Institutional Ownership, Managerial Ownership

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