Studying the Factors Affecting Price Bubble in Capital Market (Case Study: Tehran Stock Exchange Market)

Document Type : Original Article

Authors

1 PhD Student in Financial Management, Islamic Azad University, United Arab Emirates Branch, Dubai, United Arab Emirates

2 Associate Professor, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran.

3 Professor in Finance, Department of Planning & Management, Tarbiat Modares University, Tehran, Iran.

Abstract

Financial markets especially the capital market are among the most important means of equipping and allocating financial sources. The stock exchange market is one of the elements of this market. Considering the financial and economic strategic importance of this market, in case there is extensive disruption and deviation in it, it will be seriously problematic to equip and allocate the financial sources of the country. One of the factors causing these issues is the price bubble. Considering the importance of price bubble and following the financial crises caused by the formation of a bubble, the main aim of this study was to investigate the factors affecting the price bubble in the Tehran stock exchange (TSE) market. The statistical sample of this study consists of 166 companies listed in the Tehran stock exchange (TSE) market from 2007 to 2017. In this study, the effective factors and fitting of the main model have been studied using spss software and EViews. The obtained results indicate that based on the fitting of the model, except for variables of size and transparency of information which have not shown a significant effect on the price bubble, other variables including stockholder composition, P/E ratio and liquidity speed have a significant effect on the price bubble.

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