Accounting and Auditing Studies

Accounting and Auditing Studies

The Effect of Exchange Rate Pass on Sales Performance, Profitability and Efficiency with emphasizing the Asymmetric Effects of Exchange Rate Shocks

Articles in Press

Document Type : Original Article

Authors
Leila Zamanianfar 1
meysam doaei 2
zahra kohandel 3
marjan ghaffari fard 4
1 Post-Doc Researcher in Accounting, Department of Accounting, Faculty of Accounting, Shahrood, Islamic Azad University, Shahrood, Iran
2 Finance department , Esfarayen branch, Islamic Azad university, Esfarayen, Iran
3 islamic azad university
4 Master in accounting,Tarbiat Modares University,Tehran,Iran
10.22034/iaas.2024.386626.1433
Abstract
Exchange rate shocks in Iran's economy are one of the most important factors that affect the sales, profitability and efficiency of companies. Due to the importance of this issue, in this study, the exchange rate pass on the sales performance, profitability and efficiency of companies listed in the Iran Stock Exchange with emphasizing the asymmetric effects of negative and positive rate shocks, using the information of 262 companies during the period of 2007- 2021 were analyzed using GMM method. EGARCH was also used to define negative and positive rate shocks during the period of 1978-2021. EGARCH results showed that positive and negative shocks do not have the same contribution in the formation of currency fluctuations. The results of GMM showed that the negative and positive exchange rate shocks pass-through on stock returns is asymmetric and incomplete. However, negative and positive exchange rate shocks pass-through on sales performance, return on assets and profitability ratio is asymmetric but intense. So that with the increase of negative and positive exchange rate shocks by 1%, the stock returns decrease by 0.3441 and 0.2121%, respectively. The sales performance of the company increased by 67.4565 and 8.8757 percent, respectively. The return on the company's assets increased by 180.1215 and 10.1386 percent, respectively. The operating profit ratio of the company decreased by 25.1552% respectively and increases by 13.6004 percent.
Keywords
Exchange Rate Pass
Positive Shock
Negative Shock
Sales Performance
Profitability

Subjects

Accounting and Auditing Studies

Articles in Press, Accepted Manuscript
Available Online from 20 May 2024