The Impact of Corporate Governance Mechanisms on the Relationship between managers ' expectations stickiness & Future stock returns

Mohamadi, Nahid; Bahar Moghadam, Mehdi; Pourheidari, Omid

doi:10.22054/qjma.2021.49198.2108

The Impact of Corporate Governance Mechanisms on the Relationship between managers ' expectations stickiness & Future stock returns

Document Type : Research Paper

Authors

nahid mohamadi ¹

mehdi bahar moghadam ²

omid pourheidari ³

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

https://doi.org/10.22054/qjma.2021.49198.2108

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

Subjects

Accounting and various aspects of finance

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