Document Type : Research Paper


1 Department of Business Management, Rasht Branch, Islamic Azad University, Rasht, Iran

2 Assistant Professor, Department of Business Management, Rasht Branch, Islamic Azad University, Rasht, Iran

3 Professor, Department of Business Management, Rasht Branch, Islamic Azad University, Rasht, Iran


In real investment, there is a relationship between external financing and abnormal stock returns. This study predicts a negative correlation between external financing and stock returns. The dependent variable of the research is stock returns and the independent variables are net financing and equity ratio. Also, control variables of the research includes assets growth, company’s size and company’s age. In this research, the hypotheses have been tested using the financial statements of 178 industrial companies accepted in Tehran Stock Exchange over the 2012-2016 period and also regression models with panel data. The results indicate a positive correlation between external financing, in both net and composition cases, with abnormal stock returns and also a negative correlation between external financing –again in both net and composition cases- with abnormal stock returns in the stock model. In addition, when we use net and composition financing simultaneously, there is not a significant relationship between net and composition finiancing and abnormal stock returns.


Main Subjects

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