THE RELATIONSHIP BETWEEN INCOME SMOOTHING AND INVESTMENT EFFICIENCY WITH COMPANIES’ VALUE

Abstract

The main objective of this study is to examine the relationship of income smoothing and investment efficiency with the value of the companies listed on the Tehran Stock Exchange. For this purpose, the companies’ information was analyzed for a financial period from 2008 to 2012 and the statistical sample of the research includes those companies of which the fiscal year ends on March 20th. Suitable statistical tests including regression analysis and the data were analyzed with the help of SPSS software used for collecting data regarding investment for testing hypotheses. Generally, the findings indicated that the value of the income smoother companies was higher than income non-smoother companies’. Additionally, the value of companies with investment efficiency was higher than the value of companies without investment efficiency. Furthermore, the results showed that the value of income smoother companies with investment efficiency was higher than the value of income non-smoother companies with investment efficiency.