The Effect of Cost Leadership Strategy On ROA and Future Performance of Accepted Companies in Tehran Stock Exchange

Abstract

This study empirically investigates the effect  of Cost Leadership Strategy   on ROA   and  future performance  . The research data is collected from 45 firms in the Tehran Security Exchange (TSE) during 2009-2013.The statistical technique is used to examine the assumption of regressions model. To test the assumptions, three variables the  ratio of  sale to assets, the ratio of  sale to capital expenditure  and  the ratio of staff to assets replace as alternative variables    a cost leadership strategy were considered. In order to examine the hypotheses, data is collected from the annual reports of the companies using official bulletins of the Tehran stock exchange, mainly, through Novin software, Tadbir Pardaz software, and stock sites such as www.rdis.ir. The results indicated that in the firms with cost leadership strategy, there were positive relationships between the ratio of  sale to capital expenditure  with percent of growth in sales. The results also suggested that there were negative relationships between the  ratio of  sale to assets and the ratio of staff to assets with ROA   and  Long-term financial performance and Short-term economic performance .

Keywords: Cost Leadership Strategy, ROA, future performance, The Tehran Security Exchange