The effect of economic and sociological policy uncertainty on the risk of falling stock prices in listed companies

Document Type : Original Article

Authors

1 Master of Business Administration in Financial Orientation, Kharazmi University

2 Doctor of Criminal Law and Criminology and lecturer at Shahid Ashrafi University of Isfahan

3 Master of Financial Management, Shahid Beheshti University

Abstract

The present study investigated the effect of economic policy uncertainty on the risk of stock price falls in listed companies. Analyzing the impact of economic policy uncertainty on the risk of falling stock prices in listed companies can help the research literature and is of great importance. Therefore, the increasing expansion and development of various industrial and commercial institutions and companies and the sharp increase in competition between them has caused organizations and companies to think only of their organizational benefits and interests to survive and to achieve these goals of do not take any short action. Lack of attention of managers to social responsibility will prevent their effective service to society and the development and credibility of the organization. The research method is applied in terms of purpose and descriptive-correlational in nature. The research area of the companies listed on the Tehran Stock Exchange and its time area during the 6-year period (2014-2019) were selected as (93 companies). A regression model based on composite data was used to analyze the data and information collected. The results showed that the risk of falling stock prices at the company level increases with economic policy uncertainty. Economic policy uncertainty is significantly and positively related to the risk of falling stock prices at the market level.

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