THE STUDY OF RELATIONSHIP BETWEEN THE GOVERNMENT POLITICAL SUPPORT AND THE RELATIVE PROFITABILITY OF COMPANIES LISTED IN TEHRAN STOCK EXCHANGE

The relative profitability of companies in the industry as a competitiveness measurement reflects company's business strengths and weaknesses. Relative profitability is influenced by the company's operational decisions that are associated with decisions of other companies in industry. Therefore, this operational dependence among competing companies affects company's cash flows and influence the stock returns behavior. So this study assessed “the effect of the government political support on the relative profitability”. The statistical sample is consisted of 141 companies listed in the Tehran Stock Exchange during the years 2010-2014 that have been selected using Systematic Elimination Method being totally 705 years-firm. To evaluate the hypotheses, the linear regression has been used. To analyze the data and test hypotheses, the EVIEWS software has been used. According to the regression results, the following findings have been achieved:1. There is a direct and significant relationship between the government political support and company’s relative profitability.
2. There is a direct and significant relationship between the economic dimension of government political support and company’s relative profitability.
3. There is a direct and significant relationship between the social dimension of government political support and company’s relative profitability.