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2019 | 135 | 156-172
Article title

Investigating the asymmetric effects of corporate liquidity and dividend on economic growth in Iran using Smooth Transition Regression (STR) model

Content
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EN
Abstracts
EN
The objective of this paper is to examine the asymmetric effects of corporate liquidity and dividend in banking sector and stock market on economic growth in Iran. For this purpose we used the Smooth Transition Regression (STR) method based on period 1980-2018. The results indicate that the impact of corporate liquidity and dividend indices on economic growth is different for economic growth rates above and below 8.5%. Results show that earnings have a net positive impact on firm value in the presence of growth options, high external financing costs and low default risk. High levels of retained earnings enhance debt capacity but have a negative effect on equity value due to the likelihood of losing accumulated cash balances in case of default, unless offset by high external financing costs. Opposite directional effects of retained earnings on equity and debt create a U-shaped relation with firm value.
Year
Volume
135
Pages
156-172
Physical description
Contributors
  • Faculty of Economics, Management and Administrative Sciences, Semnan University, Semnan, Iran
  • Department of Economics, Faculty of Economics, Management and Administrative Sciences, Semnan University, Semnan, Iran
author
  • Faculty of Management, Tehran University, Tehran, Iran
References
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Document Type
article
Publication order reference
Identifiers
YADDA identifier
bwmeta1.element.psjd-5ea5e083-18ce-4297-acbf-9c573dff240e
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