A Review of the Impact of Business Strategies on Capital Maintenance Costs: Analyzing the Role of Financial Reporting Quality in Pharmaceutical Companies Listed on the Tehran Stock Exchange

This study investigates the impact of financial reporting quality on the strategic preferences of institutional investors, focusing on momentum and value trading strategies in pharmaceutical companies listed on the Tehran Stock Exchange between ۲۰۱۶ and ۲۰۲۲. The hypotheses were tested using multivariate linear regression with Stata software (version ۱۸). The findings reveal that institutional investors, particularly those with a long-term orientation, favor value strategies when evaluating financial reporting quality. However, contrary to initial expectations, transient institutional investors show a limited inclination toward momentum strategies within the pharmaceutical sector and instead demonstrate a stronger preference for value-based approaches. The analysis further shows that both value and momentum strategies yield abnormal returns, but momentum strategies tend to generate these returns more quickly, typically within the first three months, compared to value strategies, which achieve abnormal returns by the fourth month. Overall, the study highlights the role of financial reporting quality in shaping the timing and nature of investors' strategic choices, indicating that pharmaceutical companies with better financial reporting are more likely to attract stable, value-focused institutional investors. Furthermore, while momentum strategies offer quicker returns, their effectiveness diminishes over time, particularly in companies with deficient financial reporting. This suggests that abnormal returns may take longer to materialize in such companies, although this gap reduces as the investment horizon extends.

کلیدواژه ها:

Financial Reporting Quality ، Value Strategy ، Momentum Strategy ، Short-Term Institutional Shareholders