The role of management's expected profit on the investment efficiency in stock market
Subject Areas : Journal of Investment Knowledge
Yazdan Gudarzi Farahani
1
(Assistant Professor, Department of Islamic Economics, Faculty of Economics and Management, Qom University, Qom, Iran.)
leila barati
2
(PhD Student, Department of Financial Management, Tehran Science and Research Branch, Islamic Azad University, Tehran, Iran.)
Keywords: Expected Management Profit, Investment Efficiency, Panel data, Abnormal Investment, Tehran Stock Exchange,
Abstract :
The purpose of this article was the role of management's expected profit on the investment efficiency of companies listed on the Tehran Stock Exchange. The literature shows that with increasing accuracy of expected profits, investment efficiency increases and abnormal investment decreases. The present study was reviewed among 457 companies listed on the Tehran Stock Exchange in the period 2013-2021. In order to analyze the relationship between variables, the panel data method has been used. The results of this study showed how the expected profit of management, which is estimated under the direction of management expectations, affects investment efficiency. The effect of expected profits on abnormal investment through underinvestment and overinvestment was also examined. The results showed that the expected profit of management had a significant effect on under-investment and over-investment variable.
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