Prioritization of Financing Methods and Examination of Their Impact on the Performance of Pharmaceutical Companies Listed on the Tehran Stock Exchange
Keywords:
Financing, Company Performance, Pharmaceutical Industries, Stock ExchangeAbstract
This study aims to examine the impact of different financing methods on the performance of pharmaceutical companies listed on the Tehran Stock Exchange. The research is applied in purpose, post-event in methodology, and descriptive-correlational in nature. The statistical population included 38 pharmaceutical companies listed on the Tehran Stock Exchange during 2019–2023. Financial data were collected from financial statements and the CODAL system. Multiple regression analysis was conducted using EViews software. Firm performance was measured through return on assets (ROA) and return on equity (ROE), while financing methods (internal financing, external financing, and retained earnings) were considered as independent variables. The results indicated that financing methods significantly affect firm performance. External financing had a positive and significant effect on ROE, while internal financing had a negative and significant impact. Retained earnings also negatively influenced ROE. Regarding ROA, both internal and external financing showed significant negative effects, whereas retained earnings exerted a positive and significant effect. The findings suggest that adopting an optimal combination of internal and external financing sources plays a critical role in enhancing the performance of pharmaceutical companies. Balanced financing strategies can strengthen profitability, financial sustainability, and competitiveness.
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Copyright (c) 2025 Javad Shafaei (Author); Habib Aghajani (Corresponding author); Sakineh Sojoodi (Author)
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