Economic Fluctuations, Managerial Ownership and Firm Value

Objectives: The main purpose of this study is to investigate the relationship between economic fluctuations, managerial ownership, and firm value among firms listed on the Tehran Stock Exchange (TSE). The research specifically examines how macroeconomic variables such as inflation rate fluctuations and GDP growth interact with managerial ownership, investment growth, and financial leverage to influence firm value. Methodology/Design/Approach: This study is applied in nature and adopts a causal (ex post facto) correlational design. The statistical population includes all firms listed on the TSE, from which 133 firms were selected using the systematic elimination sampling method. The study covers a seven-year period from 2017 to 2023, and data were analyzed using multiple regression models. Findings: The results show an inverse relationship between inflation rate fluctuations and firm value, while no significant relationship is found between GDP growth and firm value. The interaction between managerial ownership and GDP growth positively affects firm value, whereas the interaction between managerial ownership and inflation rate fluctuations has no significant effect. Moreover, the interaction between investment growth and GDP growth has a positive effect on firm value, but its interaction with inflation rate fluctuations does not. Finally, the interaction between financial leverage and inflation rate fluctuations has an inverse effect on firm value, while the interaction between financial leverage and GDP growth is insignificant. Innovation: This study contributes to the understanding of how economic fluctuations interact with firm-specific characteristics to shape firm value in emerging markets. The findings offer practical insights for policymakers and managers, emphasizing the importance of managing ownership structures and leverage decisions under varying macroeconomic conditions.