The Effect of Resources Financing and Interlocking Stockholders on the Tehran Stock Exchange Market's Response to Reported Earnings of Companies

This study examines the impact of resource financing and interlocking stockholders on the Tehran Stock Exchange market response on reported earnings among companies listed on Tehran Stock Exchange. The aim of this research is to answer the fundamental question، whether the amount of reliance of companies on debt financing has effect on market response on their reported earnings or not? In this research، in order to investigate of the impact of interlocking stockholders، we examine the role and impact of institutional owners on market response on reported earnings. The research sample consists of 96 companies listed in Tehran Stock Exchange during the period 2002 to 2011. For investigating the impact of resource financing and interlocking stockholders on the market response on reported earnings، econometric panel data approaches were used. The result of testing hypothesis shows that the resource financing has a negative significant effect on market response on earnings so that with increasing reliance of companies on debt financing the market response on earnings is reduced. The results also show that the interlocking stockholders has a positive significant effect on market response on earnings so with increasing presence of interlocking stockholders، market response on earnings will increase too.