Examining the Impact of Fiscal Policy Instability on the Selection of Investment Strategies in Companies Listed on the Tehran Stock Exchange
Keywords:
Financial Policies, investment strategies, Tehran Stock Exchange, GZ14Abstract
Objective: The objective of this study is to investigate the impact of instability in financial policies on the selection of investment strategies among companies listed on the Tehran Stock Exchange.
Methodology: This applied research adopts a descriptive–correlational approach. The statistical population includes 130 companies listed on the Tehran Stock Exchange from 2013 to 2022. Investment strategy scores were calculated using four indicators: employee-to-sales ratio, historical sales growth, the ratio of marketing and advertising expenditures to total sales, and organizational stability. These variables were annually quintile-ranked and scored. Confirmatory Factor Analysis (CFA) and path analysis were employed using LISREL software to assess relationships between financial policy instability and strategy selection.
Findings: The hypothesis testing results indicated that financial policy instability significantly affects companies’ choice of investment strategies. Defensive strategies are more influenced by variables such as current ratio, earnings per share, and inflation rate. Analytical and prospective strategies are explained by different combinations of financial ratios and indicators of organizational sustainability.
Conclusion: The findings confirm that corporate financial policies play a decisive role in determining investment strategy types. Therefore, firms should consider both internal financial indicators and broader macroeconomic instability when selecting competitive investment strategies to maintain their market position.
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