The role of financial components on the relationship between misevaluation of stock prices and innovation of listed companies using the mild transition regression (STR) model

Subject Areas : Financial Knowledge of Securities Analysis

yazdan goodarzi ¹ , Leila Barati ²

1 - Assistant Professor, Department of Islamic Economics, Faculty of Economics and Management, Qom University, Qom, Iran (Corresponding Author)
2 - PhD Student, Department of Financial Management, Tehran Science and Research Branch, Islamic Azad University, Tehran, Iran

Received: 2022-09-17 Accepted : 2022-10-08 Published : 2023-05-22

Keywords: Stock issuance, company growth, Stock Turnover, stock price misevaluation, non-linear regression model,

Abstract :

Incorrect valuation refers to a situation in which the stock price of companies in the capital market differs from its intrinsic value. Incorrect valuation of companies in the capital market considered as a phenomenon that originates from the shortcomings of the capital market. The purpose of this paper is to examine the role of stock issuance; Firm growth and stock turnover on the relationship between stock price misevaluation and firm innovation. The spatial domain of this research was the companies accepted in the Tehran Stock Exchange and the temporal domain was the years between 2013 and 2019. In this paper, the wrong valuation of the independent variable stock price and the innovation of the dependent variable company considered. In the data section, the research done by collecting the data of the sample companies by referring to the financial statements, explanatory notes and the stock exchange monthly. Based on the systematic elimination method, 147 companies selected as a statistical sample. In order to analyze the data, non-linear panel data method has been used. The results showed that the wrong valuation of the stock price has an effect on the innovation of the company, in addition to the issuance of shares; Company growth and stock turnover have a moderating role on the relationship between stock price misevaluation and company innovation.

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