Mehdi Sadidi; Maysam Ahmadvand
Abstract
This study documents the impact of corporate governance nature on momentum strategies profitability in Tehran stock exchange. To do so, we firstly examined the profitability of short term, midterm, and long term momentum strategies and found that, regarding both raw data and industry adjusted data, only ...
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This study documents the impact of corporate governance nature on momentum strategies profitability in Tehran stock exchange. To do so, we firstly examined the profitability of short term, midterm, and long term momentum strategies and found that, regarding both raw data and industry adjusted data, only midterm momentum strategy is profitable. Then, based on corporate governance index score, we categorized sample firms into two groups: democracies (firms with strong shareholder rights) and dictatorships (firms with weak shareholder rights). In the next stage, we checked momentum strategies profitability in each group. Research findings indicate that among democracies, short term and midterm momentum strategies allow investors to earn significant positive profits, while in companies with weak shareholder rights, all three momentum strategies record negative profits. The results of this research also present strong evidence that supports the market pressure hypothesis and confirm that managers of companies with strong shareholder rights are less likely to reveal private information than companies with weak shareholder rights
Ali Rahmani; Nazanin Bashirimanesh
Abstract
Voluntary disclosure of managers as one of the mechanisms of transparency are noticed by analysts and capital market participants. Identifying the determinants of voluntary disclosure can help to understand the factors that affected the transparency and efficiency of capital market and efficiency of ...
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Voluntary disclosure of managers as one of the mechanisms of transparency are noticed by analysts and capital market participants. Identifying the determinants of voluntary disclosure can help to understand the factors that affected the transparency and efficiency of capital market and efficiency of resource allocation. In this study, the characteristics of the company, corporate governance and stakeholder power as the determinants of voluntary disclosure will be discussed. The sample consisted of 146 companies listed on Tehran Stock Exchange in the period 2010- 2015. The hypothesis of this study is investigated with the structural equation modeling and multivariate regression to be comprehensive analysis of the effect of latent variables and their components on voluntary disclosure. The findings show, company's structural features have a positive and significant impact and company's performance features have significant and negative impact on the level of voluntary disclosure. Features of the board of directors, ownership structure and audit have positive and significant impact on the level of voluntary disclosure. Also Internal stakeholders, significant negative impact as well as external stakeholders have positive and significant impact on their level of voluntary disclos
Saber Sheri Anaghir Sheri Anaghir; Yahya Hassas Yeganeh; Mehdi Sadidy; Benyamin Narrei
Volume 13, Issue 52 , January 2017, , Pages 9-36
Abstract
Previous researches revealed that corporate governance mechanisms assists the investors in motivating and compelling pillars of company management to more efficient use of corporate resources with doing stewardship duty. Managers can play a critical role in using the resources through making appropriate ...
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Previous researches revealed that corporate governance mechanisms assists the investors in motivating and compelling pillars of company management to more efficient use of corporate resources with doing stewardship duty. Managers can play a critical role in using the resources through making appropriate decisions about optimal investment. Inefficient investment could be the result of poor corporate governance. In other words, corporate governance is a key and monitoring tool in investment efficiency. The purpose of this study is to analyze the relationship between corporate governance and investment efficiency in the firms listed in the Tehran Stock Exchange. For testing hypotheses multivariate linear regression model using estimated generalized least squares method (EGLS) was used. To reach the purpose of the study, a sample of 138 companies were selected by screening (systematic deleting) in the years 2008 to 2014. Based on 93 indicators of hassass yegane and Salimi (2011), we estimated the efficiency of corporate governance and its dimensions such as transparency, effectiveness of board, shareholder rights and the effects of ownership. We also measured the efficiency of investment according to the Richardson’s (2006) model. In general, the results show that corporate governance and its dimensions have a significant positive effect on the efficiency of investment. In addition, a significant and positive impact of variables control such as investment opportunities (Tobin's Q) and firm size on investment efficiency was confirmed. The cash flow had a negative and significant relationship on investment efficiency
Binyamin narrei; saber sheri; yahya Hasas-yeganeh; mehdi Sadidy
Abstract
It is believed that corporate governance mechanisms help to investors in motivating and compelling pillars of company management to the more efficient use of resources in line serve their stewardship duty. Pillars of management with optimal decisions about the investment, plays a vital role in the use ...
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It is believed that corporate governance mechanisms help to investors in motivating and compelling pillars of company management to the more efficient use of resources in line serve their stewardship duty. Pillars of management with optimal decisions about the investment, plays a vital role in the use of resources. Inefficient policies in the investment could be the result of poor corporate governance. In other words, corporate governance is key and control-monitoring factor in the efficient management and investment efficiency. The purpose of this study is to analyze the relationship between corporate governance and investment efficiency in the firms listed in the Tehran Stock Exchange. For test hypotheses multivariate linear regression model using estimated generalized least squares method was used. For the purposes of this study, a sample of 138 companies by screening , in the years 2008 to 2014 were selected. Evaluation of corporate governance and its dimensions (transparency, effectiveness of board, shareholder rights and the effects of ownership) on the basis of a variety of indicators (93 indicators) based on the ratings provided by the Hsasyeganh-Salimi (2011) and measure the efficiency of investment according to the Richardson model (2006) took place. In general, the results show that corporate governance and its dimensions have a significant positive effect on the efficiency of investment.
Mohammad Ali Bagherpour Velashani; Hossein Etemadi; Mahdi Omidfar
Abstract
The purpose of this research is to examine the relationship between thecorporate governance characteristics and accounting restatements due torapid growth of restatements in the world as well as the Iranian capitalmarket. Researchers believe that restatement is a sign of low quality offinancial reporting ...
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The purpose of this research is to examine the relationship between thecorporate governance characteristics and accounting restatements due torapid growth of restatements in the world as well as the Iranian capitalmarket. Researchers believe that restatement is a sign of low quality offinancial reporting by the companies. For doing so, similar to prior studiesand by consideration of the Iranian context a set of different corporategovernance characteristics including power of CEO, CEO changes, blockholders, largest shareholder, auditor type, auditor industry specialization,auditor changes, and finally capital structure are considered. In addition, tocontrol the possible effects of other factors, which could potentially affectfirms'''' restatement decisions, 10 new variables were added to the model.These control variables include return on assets, sales growth, operating cashflow, liquidity ratio, prior year performance, equity financing, debtfinancing, firm size, year, and industry type. The final research sampleincludes 999 observations of the Tehran Stock Exchange (TSE) listedcompanies for the period 2004-2009. The results indicate that CEO changes,auditor changes, auditor industry specialization, auditor size and largestshareholder as well as some financial characteristics such as operating cashflows ratio, liquidity ratio, and firm size are associated with the restatementsof the accounting income. Therefore, the findings support the hypothesis thatcorporate governance mechanisms can improve the quality of financialreporting.
Farshid Kheirallahi; Eshagh Behshoor; Farzad Eivani
Volume 11, Issue 44 , March 2015, , Pages 145-161
Abstract
Decreasing interest conflicts between stockholders and executives is thecorporate governance’s role and this is accentuated when managers perceivemotivations to deviate from the advantage of stockholders. Corporategovernance is likely to diminish profit management while improving theinvestors’ ...
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Decreasing interest conflicts between stockholders and executives is thecorporate governance’s role and this is accentuated when managers perceivemotivations to deviate from the advantage of stockholders. Corporategovernance is likely to diminish profit management while improving theinvestors’ understanding of cash maintenance. This study aims atrecognizing relevance among real profit management and corporategovernance. To measure profit management, Recovery models (2006) andJenni (2010) and for measuring the relevance between cash maintenance andprofit management, modified models of Opler (1999) and Phama and Fringe(1998) have been deployed in this study. Percentage of non-obligatedmembers of executive board (executive board independence) has beenutilized as the substantial feature of corporate governance. As for testing thehypotheses, multi-variable linear regression model and integratedgeneralized least squares method were used. Considering the limitationsimposed in selection, statistical sampling of the study includes 90 acceptedcompanies in Tehran Stock Exchange that have undergone research between2008 and 2012. The findings indicate that there is a meaningful positiverelevance between real profit management and cash maintenance. Investorsdecrease cash maintenance in companies with high real profit managementand compared to businesses with strong corporate governance, weaker onespossess less evaluations of cash maintenance among those which performprofit management in its high levels.
Yahya Yeghaneh; Morteza Ahmadi
Volume 10, Issue 38 , July 2013, , Pages 29-52
Abstract
Strong corporate governance structure results in better monitoring of management, timely accounting information, and increasing speed of bad news recognition in order to inform the board and taking needed action (Garcia et al, 2005). On the other hand, conservatism creates a system that prevents the ...
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Strong corporate governance structure results in better monitoring of management, timely accounting information, and increasing speed of bad news recognition in order to inform the board and taking needed action (Garcia et al, 2005). On the other hand, conservatism creates a system that prevents the managers and executives overpayment and prevents any excessive optimism (Watts, 2003). If conservatism really play a role in handling agency problems, the conflicting interests of managers and owners will increase the demand for increased conservatism. Thus, firms with better corporate governance structure, would show a higher degree of conservatism (Garcia et al, 2005). This means that there will be more expected return sensitivity to bad news compared to good news among firms with strong corporate governance structure (Basu, 1997).In this study information of 179 companies in Tehran Stock Exchange within two years 2009 and 2010, using the multiple regression analysis and cross-sectional data, mechanisms of communication between the stock's biggest shareholder, being the parent company, stock concentration, the presence of the CEO in the board, state ownership, the average stock owned by members of the board, the percentage of free float shares of the company, the presence of outside financial expert on the board of directors, the percentage of outside directors, and the auditors, the certain corporate governance mechanisms playing an important role in this regard has been studied with accounting conservatism.The results reveal that except the quality disclosure ratings and stock concentration variables, there is a significant relationship between the mechanisms of corporate governance and accounting conservatism. Corporate Governance, Accounting conservatism, Board of Director, Stakeholders
Saber Sheri; Elham Amiri
Volume 9, Issue 33 , April 2011, , Pages 39-57
Abstract
In Recent corporate scandals, one of the recurring areas of concern is related party transactions. Concern about related party transactions has increased as a result of at least two high profile bankruptcies: Enron and Adelphia. The key reason of their collapse has been attributable at least in part ...
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In Recent corporate scandals, one of the recurring areas of concern is related party transactions. Concern about related party transactions has increased as a result of at least two high profile bankruptcies: Enron and Adelphia. The key reason of their collapse has been attributable at least in part to extensive purposefully use of undisclosed or “under-disclosed” transactions. In this research, the adequacy of disclosure of related party transactions is investigated by means of a checklist prepared according to Iranian accounting standard No.12.
Research is performed over the years of 2006 to 2010 among Tehran stock exchange listed companies. According to accounting standard No.12, 14 disclosure requirements are set out and divided into two groups: 5 items are classified as general disclosure items and others are classified as other disclosure items. Then, mean disclosure is calculated and compared with the 50-percent level of disclosure included in Doing Business Reports.
The results show that companies disclose 46 percent of general disclosure items and 58 percent to 62 percent of other disclosure items. Finally, the disclosure level of each disclosure requirement is determined. The results suggest deficiency in compliance with accounting standard No.12.
Rooholah Sedighi
Volume 9, Issue 33 , April 2011, , Pages 99-125
Abstract
The primary objective of this study is to show that board structure affects the value relevance of earnings. The role of board structure is to reduce the conflicts of interests between shareholders and managers. Four attributes of board structure includes Board size, CEO membership, Duality and Board ...
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The primary objective of this study is to show that board structure affects the value relevance of earnings. The role of board structure is to reduce the conflicts of interests between shareholders and managers. Four attributes of board structure includes Board size, CEO membership, Duality and Board independence are considered in this study. These attributes are used in this study to assess the impact of board structure on information content of accounting earnings. Information dynamics models, such as the Ohlson (1995) model provide a testable pricing equation that also identifies the role non-accounting information (i.e. corporate governance) plays in determining firm value. Based on Ohlson’s (1995) model, the change in value model, as developed by Easton and Harris (1991), is modified to include the proposed interaction between board structure and earnings management. In order to hypothesis testing, the pooled GLS regression is employed as the primary technique to estimate the coefficients. These coefficients are then examined using the Wald test to find out whether the earnings response coefficients after incorporating indictors of earnings reliability are significantly different from the earnings response coefficients irrespective of any propositions. The sample was drawn from listed companies in Tehran Stock Exchange (TSE) for the years 1383 to 1387. The final sample contained 675 firm-year observations. The results reveal that board structure have no effect on information content of accounting earnings.
Y. Hassas Yeganeh; M. J. Salimi
Volume 8, Issue 30 , July 2010, , Pages 1-35
Abstract
This study investigates for developing a model for corporate governance rating in Iran. We review corporate governance literature and resources and after taking into account social, economic, political and cultural conditions of Iran, the conceptual model and questionnaire was prepared. Based on the ...
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This study investigates for developing a model for corporate governance rating in Iran. We review corporate governance literature and resources and after taking into account social, economic, political and cultural conditions of Iran, the conceptual model and questionnaire was prepared. Based on the developed conceptual model, ownership effects, shareholders right, transparency and board effectiveness were selected as criteria of the model. Every criterion includes some components and every component has some indicators.
The questionnaire was filled by academic and capital market experts and analyzed by AHP and TOPSIS methods and final model was developed. Research findings show that transparency, board effectiveness, shareholders rights and ownership effects orderly have the biggest coefficients in the model. Consistency rate of criteria's and components is also in the acceptable level. (Below 10%)
M. Araab Mazar Yazdi; R. Taher Khani
Volume 8, Issue 29 , April 2010, , Pages 97-113
Abstract
As a functional and economical procedure, the change of firm ownership into generalization, leads to a growth in firm fund and as a result, an Expansion in its commercial operation. The need for great funds in commercial units and the formation of corporation as a result, leaded to separation of ownership ...
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As a functional and economical procedure, the change of firm ownership into generalization, leads to a growth in firm fund and as a result, an Expansion in its commercial operation. The need for great funds in commercial units and the formation of corporation as a result, leaded to separation of ownership from manager firms, and so to a conflict among the managers and the owners. In recent years, corporate governance-including a network of connections among stockholders, managers, accountants, and other beneficiaries- has been posed as a decreasing factor of the great discrepancy among stockholders and also the segregation of ownership from commercial unit control. One of the most important factors which contribute to the control of management relationship is the board of director and its composition. As a result, it is of crucial importance to survey factors related to board composition and its effect on the firm operation.
The locative domain of this survey is the collection of listed Companies in Tehran Stock Exchange and its temporal domain lies between year1382 till 1386. On the basis of this, the chosen samples include 130 firms.
Considered questions in this research have been posed as six hypotheses. The result of hypothesis testing shows that corporate governance variables including the number of members of board, the number of its non-executive members and the number of major shareholders have no effect on the return on equity (ROE), but on the other hand, this variables affect Tobin’s. The results show that the number of board members has a negative and at the same time negligible effect on Tobin’s, but the nonexecutive members of board and the number of majority shareholders have positive and also insignificant effect on Tobin’s.
A. Modarres; M. Fe’li
Volume 6, Issue 23 , October 2008, , Pages 89-106
Abstract
Globalization, through linking companies to international markets and increasing competitive space, has necessitated the restructuring of companies. Combination of companies, ownership and development of target markets are among the efforts made by companies in ...
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Globalization, through linking companies to international markets and increasing competitive space, has necessitated the restructuring of companies. Combination of companies, ownership and development of target markets are among the efforts made by companies in order to continue their economic lives. These companies are also forced to utilize domestic and international capital markets to obtain their financial resources. In this regard, corporate governance is a criterion which plays a fundamental part in decision making process of investors and leasers.
In order to investigate the role of institutional stock holders and percentage of non-Executive managers as some criteria of corporate governance on firm value, the 4-year data of 97 firms were studied. The findings of this study show that there is a significant relationship among institutional stockholders and company value, as well as presence of non-Executive managers and company value. The findings of this study, in line with similar researches, support the view that presence of institutional stockholders in the board of directors of companies increases company value.
Yahya Hassas Ycganeh; Narges Yazdanian
Volume 5, Issue 17 , April 2007, , Pages 151-171
Abstract
This research seeks to find an answer to this quest ion ''how do some corporate governance practices affect earning management in Iran?"
The investigated corporate governance principals in this research are: the percentage of institutional investors' ownership, the existence of non-executive directors ...
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This research seeks to find an answer to this quest ion ''how do some corporate governance practices affect earning management in Iran?"
The investigated corporate governance principals in this research are: the percentage of institutional investors' ownership, the existence of non-executive directors i n the board of directors, the absence (non-existence) of executive directors as the chief or ...... of board of directors, the existence or internal auditors.
In this research Jones modified model has been used to determine earning management which is measured by discretionary accruals. For this purpose, the data of l77 firms during the years 1382 to 1384 have been used. The results of this research show that when the percentage of institutional investors' ownership in firms is more than 45%,the earning management decreases. Moreover the results show that there is no meaningful correlation between the existence of non-executive directors in the board of directors, the absence (non-existence) of executive directors as the chief or ...... of board of d i rectors, the existence of internal auditors and earning management.
