Document Type : Research Paper
Authors
1 PhD Student in Accounting, Shahid Bahonar University of Kerman, Kerman, Iran
2 Associate Professor of Accounting, Shahid Bahonar university of Kerman, Kerman,Iran
3 Professor of Accounting, Shahid Bahonar University of Kerman, Kerman, Iran
Abstract
Predicting stock rates and securities pricing is one of the most important issues in financial markets. The information provided by managers in corporate financial statements helps investors make optimal decisions. The value of this information depends on their accuracy and correctness, and managers' biases distort the information correctly and lead to incorrect predictions and, of course, wrong decisions. Corporate governance is created by overseeing the opportunistic behaviors of managers and with the aim of reducing the conflict of interest between shareholders and managers.
The aim of this study was to investigate the effect of corporate governance mechanisms on the relationship between managers' expectations and stock returns. Stock returns were calculated using the Fama and French three-factor model. It is an institutional agent and shareholder. The research hypotheses were tested using data from 178 companies whose data were available during the years 1390 to 1396 and using multivariate regression and combined data.
Findings indicate that there is a significant relationship between managers 'expectations stickiness and stock returns and also only the mechanism of percentage of institutional shareholders has a significant effect on the relationship between managers' expectations stickiness and stock returns.
Keywords
- managers '
- expectations stickiness
- dual roles of CEOs
- institutional shareholders
- non-executive members
- and Fama and French'
- s three-factor model
Main Subjects
- Bouchaud, J. Kruger, P. Landier, A. & Thesmar, D. (2017). Sticky Expectations and the Profitability Anomaly. Journal of Finance, Forthcoming, HEC Paris Research Paper No. FIN-2016-1136, Swiss Finance Institute Research Paper No. 16-60.
- Calvo, G. A. (1983). Staggered Prices in a Utility Maximizing Framework. Journal of Monetary Economics, XII (1983), 383–398.
- Coibion, O. & Gorodnichenko, Y. (2015). Information Rigidity and the Expectations Formation Process: A Simple Framework and New Facts. American Economic Review.
- Coibion, O. & Gorodnichenko, Y. (2012). What can survey forecasts tell us about information rigidities? Journal of Political Economy, 120, 116-159.
- Fama, Eugene F. & French, K. R. (1992). The Cross-Section of Expected Stock Returns. The Journal of Finance, 47, 427-465.
- Jean-Philippe, B. & Philipp, K. & Augustin, L. & David, T. (2017). Sticky Expectations and the Profitability Anomaly. SSRN.com.
- Imran, K. & Farhan, W. (2016). Impact of Corporate Governance and Ownership Structure on Capital Structure. International Journal of Management Sciences and Business Research, 5(11), 119-133.
- McNulty, T. Zattoni, A. & Douglas, T. (2013). Developing Corporate Governance Research through Qualitative Methods: A Review of Previous Studies. Corporate Governance: An International Review, 21(2), 183- 198.
- Mankiw, G. & Reis, R. (2006). Pervasive Stickiness. American Economic Review, 96 (2), 164‐
- Maher, M. & Andersson, T. (2000). Corporate Governance: Effects on Firm Performance and Economic Growth(OECD working paper).
- Rowl, B. & Pasaribu, F. (2010). Asset Pricing Model Selection. Journal Akuntansi & Manajemen, 21(3), 217-230.
- Stattman, D. (1980). Book value and stock returns. The Chicago MBA, A Journal of Selection Papers, 4, 25-45.
- Badavar Nahandi, U. Zeinali, M. & Nikooyan. E. (2016). The Impact of Corporate Governance Mechanisms on the Information Efficiency of Companies Listed on the Tehran Stock Exchange. Management Accounting and Auditing knowledge, 5(19),1-16. [In Persian]
- Hossein Zadeh, A. & Ahmadi Nia, S. (2009). Investigate the relevance of accounting profit components and operating cash flows to stock returns. Financial Accounting Quarterly, 1 (3), 130-107. [In Persian]
- Hasas Yeganeh, Y. & Ahmadi, M. (2013). The relationship between corporate governance mechanisms and conservatism. Empirical studies of financial accounting, 11(38), 52 - 29. [In Persian]
- Khodadadi, V. & Nikar, J. (2016). The effect of corporate governance criteria on the timeliness of property reporting disclosure. Empirical studies of Financial Accounting. 13(52), 53 - 74. [In Persian]
- Rahnamay Rodposhti, F. Heibati, F. Taaleb Nia, Gh. & Navavi, Chashemi, S, A. (2012). Presenting a model for measuring the impact of corporate governance mechanisms on earnings management in Tehran Stock Exchange. Management Accounting Quarterly, 5(12), 79 110. [In Persian]
- Deilami, S. & Safari Geraeeli, M. (2016). Investigating the relationship between corporate governance quality and stock return volatility. Empirical accounting research, 6(1), 115 – 136. [In Persian]
- Shamsadini, K. Daneshi, V. & Seidi, F. (2018). Investigating the Impact of Investor Behavior and Management on Stock Returns. Accounting knowledge, 9(2), 163-189. [In Persian]
- Shiri, Y. Sajadi, H. & Vaez, S, A. (2018). The effect of managers' expectations stickiness on the relationship between profitability stability irregularities and stock price concurrency. Accounting and Auditing Reviews, 25(3), 367-386. [In Persian]
- Safari Gerayli, M. & Rezaee Pitenoee, Y. (2017). Provide a model of the relationship between managers' religiosity and the risk of falling stock prices with emphasis on the moderating role of corporate governance. Financial Accounting Quarterly, 9(35), 49-72. [In Persian]
- Gaemi, M.H. & Eskandari. T. (2015). Investigating the behavior of company managers in forecasting annual profits. Quarterly Journal of Experimental Studies in Financial Accounting,11(40), 13-25. [In Persian]
- Gorbani, B. & Khatiri, M. (2014). Unconventional stock return trend. Financial Accounting Quarterly, 6(21), 110-128. [In Persian]
- Kimiyagari, A.M. Eslami, Bidgoli, GH. & Eskandari, M. (2007). Investigating the relationship between risk and return in Tehran Stock Exchange based on the three-factor model of Fama and Farang. Financial Research, 9(23), 61-82. [In Persian]
- Hadiyan, R. Hashemi, S.A. & Samadi, S. (2017). Evaluating the effect of financial constraint factor on the ability to explain stock returns by three-factor models of Fama and French, four-factor Carhart and five-factor Fama and French. Financial Accounting Quarterly, 9(34), 1-34. [In Persian]
)