Relationship between Financial Report Readability and Stock Return Synchronicity with the Moderating role of Institutional Ownership and Information Asymmetry

Baghoomian, Rafik; Rajabdorri, Hossein; Khanizolan, Amirreza

doi:10.22054/qjma.2021.41277.1996

Relationship between Financial Report Readability and Stock Return Synchronicity with the Moderating role of Institutional Ownership and Information Asymmetry

Document Type : Research Paper

Authors

Rafik Baghoomian ¹

Hossein Rajabdorri ²

amirreza khanizolan ³

¹ shahid beheshti uni

² Ph.D.Accounting Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran

³ Ph.D. student of Accounting, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran

https://doi.org/10.22054/qjma.2021.41277.1996

Abstract

The purpose of this study is to investigate the relationship between financial report readability and stock return synchronicity with the moderating role of institutional ownership and information asymmetry in companies listed in the Tehran Stock Exchange (TSE). This research is in terms of its purpose. Its period is from 2015 to 2019, and the selected sample consists of 171 companies listed in TSE. To test the research hypotheses through panel data, the ordinary least squares regression method in Eviews software was used. The findings of the research hypothesis test show that there is a negative and significant relationship between financial report readability and the stock return synchronicity. Also, institutional ownership as a moderating variable negatively correlates the illusion of financial report readability and the synchronization of stock prices. Additionally, the moderating effect of the information asymmetric variables on the relationship between the financial report readability and the price synchronization is positive and significant.
According to the findings, on the one hand, it is necessary to examine the implications of financial report readability. On the other hand, in order to improve the market, more attention needs to be paid to the issues affecting the stock return synchronicity.

Keywords

Financial Report Readability

Stock Return Synchronicity

Institutional Ownership

Information Asymmetry

Subjects