Effective Factors of Price Bubble in Tehran Stock Exchange

Abstract

The aim of this study is to investigate effective factors of price bubble in Tehran Stock Exchange. In order to achieve this objective, 92 companies during the 5-year period from 2006 to 2010 are studied. Predicted income, industry characteristic, ownership structure and dividends are considered as effective factors on price bubble and so independent variable and price bubble are regarded as dependent variable. To test the hypotheses, multivariate regression model is used. The results indicate that predicted income and dividend are effective factors on price bubble. The relationship between predicted income and dividend with price bubble is positive and significant showing that increasing dividend and predicted income leads to price bubble. The results also highlights that there is not a significant relationship between industry characteristic, ownership structures with price bubble. These results indicate that firms behavioral factors are effective factors on price bubble.

Keywords: Predicted Income, Industry Characteristic, Ownership Structure, Dividends, Price Bubble

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