Investigating the moderating effect of Leader and Young firms in industry on the relationship between Peer Firms and the Firm's Investment based on the theories of Information Deficit and Competitiveness

Document Type : Research Paper

Authors

1 M.A. of Accounting, Amin Institute of Higher Education, Fooladshahr, Iran.

2 Assistant Professor, Department of Accounting, Payame Noor University, Tehran, Iran.

3 M.A. of Accounting, Khorramabad Branch, Islamic Azad University, Khorramabad, Iran

10.22099/jaa.2024.48344.2369

Abstract

The investment process refers to the ability to allocate and monitor the optimal use of resources. Making strategic corporate decisions such as investment requires examining all the influencing factors, including industry factors and decisions of other peer companies. Therefore, the aim of the research is to investigate the moderating effect of leader and young companies in the industry on the relationship between the performance of peer companies and the company's investment based on the theories of information deficit and competitiveness. This research is an applied study and has an inductive comparative approach. Multiple regression based on panel data has been used to analyze the research hypotheses. For the statistical sample, the information of 128 companies admitted to the Tehran Stock Exchange during the years 2011 to 2023 was used. The result of the first hypothesis, in accordance with the theory based on competitiveness and the theory based on information, showed that companies prefer to model and imitate the investment behavior of peer companies in the industry in order to estimate the strategy and amount of their investments and prevent the costs of repeating operations. The result of the second hypothesis showed that if there are leader companies in the industry, the positive effect of the peer companies' performances on the company's investment are strengthened, but the result of the third hypothesis showed the presence of young companies in the industry does not reinforce the positive effect of peer companies' performance on the firm's investment.

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Journal of Accounting Advances
Volume 15, Issue 2
November 2023

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History

  • Receive Date: 13 September 2023
  • Revise Date: 20 January 2024
  • Accept Date: 17 January 2024

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