Stock Price Crash and Business Strategy: Evidences of Defensive and Prospective Strategies
Quarterly Journal of Securities Exchange

Quarterly Journal of Securities Exchange

Stock Price Crash and Business Strategy: Evidences of Defensive and Prospective Strategies

Document Type : Original Article

Authors
Abdolmajid Abdolbaghi Ataabadi 1
Mohammad Fatehi 2
Somayeh Tahmasebi 3
1 Management
2 shahrood university of technology
3 financial
10.22034/jse.2020.11034.1294
Abstract
Investors are always concerned about protecting their investment and the stock price crash risk threatens this investment. The stock price crash risk, although related to the market, can be due to the type of business strategy of the company that managers of the company to compete with competitors So that they can increase their rewards by increasing profits, The stock price crash risk is a vital element in the return on equity for investors, therefore, the present research "Evaluating the impact of Defensive and Prospector strategies of business on stock price crash" has tried to investigate business strategies on falling stock prices in companies listed to Tehran Stock Exchange. The present research is based on the purpose of applied research and on the other hand, in terms of the nature and method of research, is a descriptive (correlation type). The statistical population of this research is all companies accepted in Tehran Stock Exchange. In this research, systematic elimination method was used for sampling. Finally, 113 companies were selected and a panel regression analysis was used to analyze the data. The results indicate that business defensive strategies will reduce the stock price crash risk, but prospective strategies will increase the stock price crash risk.
Keywords
Stock price Crash
Business Strategy
Defensive-Prospective Strategy
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Quarterly Journal of Securities Exchange
Volume 13, Issue 49
Summer 2020
Pages 5-22