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Evaluate the Relationship between Company Performance and Stock Market Liquidity

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  • Mohammad Reza Dalvi
  • Ebrahim Baghi

Abstract

In this paper, the relationship between performance and liquidity of shares listed on the Tehran Stock Exchange investigated. In countries where the capital market is one of the main sources of financing units their business, a lot of research is in this field, that the rapid growth of the capital market in Iran, the necessity of such research is more evident. The present study with examined data from 154 companies listed in Tehran Stock Exchange between 1383 and 1388 with the combinational methods, the relationship between business performance and liquidity has been studied. This study supports the theory of representation and feedback between performance scales and stock Liquidity, using by multiple regressions has been evaluated and compared. The results of investigation show that between the liquidity and performance scales a strong correlation was observed. By comparing the two performance measures (return on assets and Q Tobin index) indicators that Q Tobin index is better to use of market values,because that more suitable for studying the relationship between performance and the company's liquidity.

Suggested Citation

  • Mohammad Reza Dalvi & Ebrahim Baghi, 2014. "Evaluate the Relationship between Company Performance and Stock Market Liquidity," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(1), pages 136-144, January.
    • Handle: RePEc:hur:ijaraf:v:4:y:2014:i:1:p:136-144
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