Investigation the association between conservatism and investment efficiency with respect to firm’s financing status and ultimate ownership in Tehran Stock Exchange Market
Volume 11, Issue 44, Winter 2015, Pages 97-116
Mahdi Moradzadehfard, Maryam Farajzadeh, Shima Karami, Morteza Adlzadeh
Abstract The purpose of this research is to examine both the relationship between accounting conservatism and level of investment under the need or no need of financing conditions and the impact of ultimate ownership on this association. The statistical society of the present research contains 103 companies selecting from all companies listed in Tehran Stock Exchange using removal method over the time span of 2006-2010. Combined data method with fixed effect has been used in order to test the research hypothesis. The result depicts that the association between conservatism and investment is significantly negative when a firm do not need external financing. Nonetheless, this association is significantly positive in companies which need external financing. Furthermore, we find that the relationship between conservatism and investment in the companies whose ultimate ownerships controller is governmental or semi governmental firms is significantly negative. Thus, when the agency problem is enhancing, conservatism acts as a mechanism to decrease this problem and engenders reduction in investment cost
Information Uncertainty, Information Asymmetry and Growth Options
Volume 10, Issue 39, Autumn 2013, Pages 125-145
Mahdi Moradzadehfard, Morteza Adlzadeh, Maryam Farajzadeh, Sedigheh Azimi
Abstract Information uncertainty has been an old topic in finance literature. Information uncertainty means ambiguity about a firm’s fundamental value, which may arise from two conventional sources: 1) characteristics of the business or industry, and 2) the company’s disclosure policy. The first source related to growth options and second source related to information asymmetry. From investors’ perspective the mechanisms and outcomes of every source are quite different. In this research we use from earning forecast dispersion as a proxy for measuring information uncertainty. We use stock turnover and price impact as proxies for information asymmetry. To control firm’s growth options, we use firm age, market-to-book ratio, and capital expenditure over total assets and Tobin’s Q. We use panel data regression model to analyze information. Our results indicate that information uncertainty has a positive relationship with information asymmetry and growth options.