The Impact of Company Geographic Location on Stock Market Indices (مقاله پژوهشی دانشگاه آزاد)

چکیده

Objectives: Market indices are essential indicators of overall market performance, yet the geographic distribution of firms may significantly influence market behavior. This study investigates the relationship between firm location and stock market indices to uncover how regional dispersion impacts overall market performance. Methodology/Design/Approach: The study adopts a descriptive-survey design complemented by analytical methods. Geographic Information Systems (GIS) and relevant APIs were utilized to gather detailed data on company locations. Hypotheses were tested using regression analysis and fixed effects models, with additional correlation assessments to examine the interplay between firm locations and stock market performance. Findings: The empirical results demonstrate a negative regression coefficient between firm geographic location and the stock market index. Specifically, each positive unit change in geographic location is associated with a decrease of approximately 93.297 units in the overall index. Moreover, if all firms were hypothetically concentrated in a single geographic region, the index would be projected at 12,235. These findings suggest that relocating firms from higher to lower geographic regions could reduce the overall stock market index. Innovation: This study offers original insights into the spatial dynamics of stock market behavior by highlighting the significant influence of geographic distribution on overall market indices. It contributes to a nuanced understanding of how regional clustering or dispersion of firms may shape financial market outcomes.