Applied Research in Financial Reporting

Applied Research in Financial Reporting

Management Learning from the Market and Investment Efficiency: Transitioning from Price Signals to Sustainable Corporate Value Creation

Document Type : Original Article

Authors
1 Assistant Professor of Financial Management, Department of Management, Economics and Accounting, Faculty of Humanities and Social Sciences, Golestan University, Gorgan, Iran.
2 accounting group, faculty of industrial engineering and management, shahrood University of technology, shahrood, iran.
10.22034/arfr.2026.557701.2214
Abstract
This study aims to investigate the effect of managerial learning from the market on firm value and the mediating role of investment efficiency in the Iranian capital market. The research sample consists of 127 firms and 2,286 firm-year observations over the period 2008 to 2024. Partial least squares structural equation modeling (PLS-SEM) was employed to test the research hypotheses. The findings reveal that managerial learning from the market has a positive and significant effect on firm value; however, its effect on investment efficiency is not statistically significant, and consequently, the mediating role of investment efficiency is not confirmed. These results indicate that Iranian managers improve investors' perception of firm value by analyzing market feedback. Nevertheless, due to structural limitations of emerging markets such as weak information transparency, exchange rate volatility, and investors' short-term horizons, this learning process does not necessarily lead to improved investment efficiency. In other words, firm value arises more from the market's perception of managerial quality and rationality than from the optimal allocation of capital resources. By emphasizing managerial learning from the market as an independent mechanism for sustainable value creation, this study demonstrates that managers' ability to interpret price signals and align organizational decisions with stakeholder expectations plays a decisive role in value creation for firms operating in emerging markets.
Keywords

  • Receive Date 05 November 2025
  • Revise Date 24 June 2026
  • Accept Date 19 August 2026