The Effect of Peer Firms on Corporate Financialization: The Role of Industry Competition, Financial Flexibility, and Corporate Risk-Taking

تأثیر همتایان بر مالی‌شدن شرکت‌ها: نقش رقابت صنعت، انعطاف‌پذیری مالی و ریسک‌پذیری شرکت

Narges Hamidian and Hamed Marzian2
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Narges Hamidian: Assistant Professor of Accounting, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran.
Hamed Marzian2: PhD Student in Financial Engineering, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran.

Journal of Accounting Advances (JAA), 2025, vol. 17, issue 2, 165-208

Abstract: In recent years, corporate financialization has emerged as a key trend in the global economy, attracting the attention of researchers and policymakers. This phenomenon refers to the growing share of financial investments in companies’ financial position statements and a declining focus on operational activities. One important aspect of this trend is the influence of peer firms’ financial behavior within the same industry. This study investigates the impact of peer firms’ financialization on corporate financialization and examines the moderating roles of industry competition, financial flexibility, and corporate risk-taking in this relationship. A sample of 143 firms listed on the Tehran Stock Exchange during the period 2011–2023 was analyzed using panel data and regression models. The findings reveal that peer firms’ financialization has a significant and positive effect on corporate financialization. Furthermore, financial flexibility and corporate risk-taking intensify this relationship as moderating factors. However, industry competition did not show a significant moderating effect, indicating a heterogeneous response of firms to peer financialization behavior under competitive conditions. These results highlight that in uncertain environments; firms are more likely to emulate their peers' financial behavior—depending on their own financial and strategic characteristics—to make more optimal financial decisions. The study provides useful insights for managers and policymakers by underlining the importance of peer behavior and contextual factors in shaping corporate financial strategies, particularly in high-risk and uncertain conditions.

Keywords: Tax Strategy; Optimal use of Resources; Management Competence; Corporate Governance (search for similar items in EconPapers)
JEL-codes: G23 G32 G34 L13 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jaccad:023585

DOI: 10.22099/jaa.2026.53825.2529

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