Investigate the Effect of Ownership Change on the Financial Performance of Listed Companies in Tehran Stock Exchange

Privatization and reduction of government incumbency in economic activities constitutes the major part of the economic structure adjustment policies. Privatization not only increases non-governmental sector's participation in economic activities but also stimulates entrepreneurship, initiative, creativity and innovation and will apply power of the government to conduct necessary studies for formulating effective macroeconomic policies. On other hand, strong capital markets are considered as one of the important pillars of economic growth and development. With using their own internal mechanisms, these markets will determine the fair price of the shares and optimal allocation of capitals and their development is seen as a criterion for ranking countries in terms of economic development. The present study aimed to analyze the impact of ownership change on changes in risk and return among listed companies in Tehran Stock Exchange. The population of the study consisted of all 27 companies in the last twenty years which undergone a change of ownership in their structures. Results supports both the main hypotheses of the study, indicating that the change of ownership of the companies participating in the Tehran Stock Exchange leads to a significant difference between the average return before and after their change of ownership. This average difference is also true about beta coefficient, so that percentage of changes in average return decreased, while the beta coefficient increased.