Investigating the Non-Linear relationship between Growth and Profitability of the Companies Listed in Tehran Stock Exchange

The goal of present research is to investigating the Non-Linear relationship between growth and profitability of the companies listed in tehran stock exchange (TSE). In this regard, the effects of firm size, financial leverage and liquidity ratio have been controlled either. Statistical society of present study consists of 173 listed companies of Tehran Stock Exchange during 2003 to 2011. First, after examing the literatures, which has confirmed the nonlinear relationship between growth and corporate profitability, this stydy attempted to assess the reliability of data using Levin, Lin and Chow Test, And then nonlinear relationship using Eviews software is estimated. Analysis results express that, there is a significant non-linear relationship between growth and corporate profitability, That coincided with the growth of the company, Its profitability increases, but this relationship has a threshold exists, and from that point onwards, with increse of the company grows in any amount, its profitability is reduced.