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Examining the Relationship between Economic Variables and Financial Performance of the Companies in Tehran Stock Exchange

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  • Ali Akbar Nazari
  • Mohammad Taher Ahmadi Shadmehri

Abstract

This study aims to identify long-term financial performance of the companies in Tehran Stock Exchange and some economic variables like inflation rate, liquidity growth rate, exchange rate, and oil income. In this study, data was analyzed in a quarterly form from 2005-2013 using self-regression with distributional lags. Results of co-integration test showed a long-term correlation between economic variables and growth rate of cash return index. The long-term correlation between growth rate of cash return index and oil return and exchange rate was negative while the correlation between growth rate of cash return index and inflation rate was positive. Also, the significance of cash growth rate coefficient was rejected at 90% significance level.

Suggested Citation

  • Ali Akbar Nazari & Mohammad Taher Ahmadi Shadmehri, 2016. "Examining the Relationship between Economic Variables and Financial Performance of the Companies in Tehran Stock Exchange," International Business Research, Canadian Center of Science and Education, vol. 9(7), pages 188-197, July.
    • Handle: RePEc:ibn:ibrjnl:v:9:y:2016:i:7:p:188-197
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    References listed on IDEAS

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    More about this item

    Keywords

    economic variables; cash return index of the stock; self-regression with distributional lags; monetary theory of inflation; arbitrage pricing theory;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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