*Department of Human resources, Nour Branch, Islamic Azad University, Nour, Iran
**Assistant professor, Department of human resources, Quemshahr Branch, Islamic Azad University, Quemshahr, Iran
Online published on 16 August, 2018.
This research tries to investigate relationship between firm strategy and price reaction to share earning, the strategies examined include cost management strategies and differentiation strategies, each of these strategies is due to specific circumstances that have on information environment of firm, which ultimately affects price reaction. So, by using a systematic elimination sampling method and Cochran method, 117 firms were selected among the firms listed in Tehran Stock Exchange. In order to test research hypothesis, the least squares regression method was used, the results show that firms that use cost management strategies have less price reaction, but firms that choose differentiation strategy as their base and produce innovative and different products, have a higher price reaction.
Firm strategy, cost management strategy, differentiation strategy, market reaction to share earning
