The Relationship Between Institutional Cross-Ownership and the Cost of Equity according to Product Market Competition

Subject Areas : Financial accounting

Mansour  khojasteh ahvazi ¹ (PhD student, Department of Accounting, Faculty of Economics and Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran)
fatemeh  Sarraf ² (Assistant Professor of Accounting Department, Islamic Azad University, South Tehran Branch, Tehran, Iran)

Received: 2023-03-22 Accepted : 2023-07-31 Published : 2023-06-20

Keywords: cost of equity, product market competition, Institutional Cross-Ownership,

Abstract :

As institutional investors can influence corporate decisions and product market strategies, institutional cross-ownership changes the way companies operate and make decisions. The relationship between Institutional Cross-Ownership and the cost of equity according to product market competition. The statistical population of the study is all companies listed on the Tehran Stock Exchange and using the systematic elimination sampling method, 152 companies were selected as the sample of the research in an 8-year period between 2013 and 2021. The method used to collect information is a library and the relevant data for measuring variables were collected from Codal website and companies' financial statements and then Eviews software was used to test the research hypotheses. The results of the research hypotheses test showed that the cost of equity for companies with Institutional Cross-Ownership is lower than other companies, and the negative effect of Institutional Cross-Ownership on the cost of equity is greater in markets with higher product competition.