Investigating the Factors Affecting Sustainable Growth: A Case Study of Companies Listed on the Tehran Stock Exchange

Document Type : Original Article

Authors

1 Faculty of Industrial and Systems Engineering, Tarbiat Modares University, Tehran, Iran

2 Faculty of Industrial and Systems Engineering, Tarbiat Modares University, Tehran, Iran.

Abstract

This study focuses on the significance of sustainable growth as a key performance indicator and investigates the factors influencing it among companies listed on the Tehran Stock Exchange (TSE) within the pharmaceutical and automotive parts industries during the period of 2009 to 2023. The primary aim is to identify and elucidate the roles of internal factors (working capital management, financial leverage, profitability, liquidity) and external factors (inflation rate, economic growth rate, exchange rate) on the sustainable growth of these companies.
This research employs a quantitative approach using panel data analysis with fixed effects. The sample consists of 60 companies (30 from each industry) selected through purposive sampling. Financial data were extracted from the companies' financial statements, and macroeconomic data were obtained from official sources. The data were analyzed using regression analysis in Stata software.
The results indicate that efficient working capital management, financial leverage, and profitability directly and significantly increase the sustainable growth of the examined companies. Conversely, the inflation rate and economic growth rate have a negative and significant effect on their sustainable growth. Liquidity and the exchange rate did not show a significant relationship with sustainable growth.
The findings of this study underscore the crucial role of optimal management of internal financial resources (working capital and profitability) and the strategic use of financial leverage in achieving sustainable growth. Furthermore, the negative influence of macroeconomic factors such as inflation and unstable economic growth highlights the necessity of a stable economic environment to facilitate the sustainable growth of companies.

Keywords

Main Subjects

References

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Budget and Finance Strategic Research
Volume 6, Issue 3 - Serial Number 23
Autumn Quarterly
September 2025
Pages 69-96

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  • Receive Date: 29 January 2025
  • Revise Date: 30 June 2025
  • Accept Date: 26 August 2025

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