Asymmetric Reaction of Market for Non-Continuing Items in the Profit or Loss Statement: Moderating Role of Company's Sustainability Performance

In recent years, sustainability has garnered significant attention as a critical issue, emphasizing the integration and balance of environmental, economic, and social dimensions. These three pillars collectively form the foundation of supply chain sustainability, offering the potential to harmonize the interests of diverse stakeholder groups. This study aims to explore the impact of corporate sustainability performance on the asymmetric market response to non-continuing profit or loss items transactions or events that do not recur in a company's regular operations among companies listed on the Tehran Stock Exchange. The research analysed a sample of 110 companies over the period from 2016 to 2022. This applied study employed a post-event methodology, utilizing a panel data approach to test the research hypotheses. Statistical analysis was conducted using Eviews software. The findings revealed an asymmetric market response to positive and negative non-continuing items in the profit or loss statements. Specifically, the market responded negatively to positive non-continuing items and positively to negative ones. This asymmetric reaction can be attributed to the unique characteristics of non-continuing items, as market mechanisms differentiate between positive and negative events based on their distinct impacts on the company’s profitability and operations. Furthermore, the evidence suggests that enhanced corporate sustainability performance mitigates the market's asymmetric evaluation of these non-continuing items. By improving sustainability practices, companies can reduce market misjudgements, thereby aligning stakeholder perceptions more closely with the firm's overall strategic direction and operational realities.