Advanced Search
MyIDEAS: Login to save this article or follow this journal

Studying the Relationship between Institutional Ownership and Conservatism in Companies Accepted in Tehran Stock Exchange

Contents:

Author Info

  • Abdolkarim Moghaddam

    (University of Payam Noor)

  • Vahid Amirzadeh

    (University of Shahid Bahonar)

  • Ali Ali Heidari

    ()
    (Kerman Science and Research Branch)

Registered author(s):

    Abstract

    Due to the problems of representatives, managers of companies might not use company resources to increase wealth of shareholders. Institutional shareholders, as the controlling mechanism of corporate governance, can use their voting power in active monitoring on company's procedures and operations and manager's decisions due to owning a considerable part of company stock. In this research, the attempt was made to determine effects of the presence of institutional owners on conservative accounting. In order to study these communications, Ball and Shivakumar's mode land Givoly and Hayn's regression models along with financial information of 60 companies from 2001 to 2010 were used. The results implied a positive relationship between institutional owners and profit conservatism using both of the mentioned models. Consequently, it could be claimed that these shareholders are active supervisors who encourage managers to report quality profit. Considering the dissimilarity of institutional investors’ motivations in monitoring accounting procedures of the company, different relationships of institutional ownership and conservatism were also studied in this research by categorizing institutional investors to active and inactive ones. The results demonstrated an inverse relationship between inactive institutional owners and conservatism using Ball and Shivakumar's model while this relationship was positive and direct in Givoly and Hayn's model. Also, a positive relationship was found between active institutional owners and profit conservatism in both Ball and Shivakumar's and Givoly and Hayn's models.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.hrmars.com/admin/pics/1709.pdf
    Download Restriction: no

    File URL: http://www.hrmars.com/admin/pics/1709.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences in its journal International Journal of Academic Research in Accounting, Finance and Management Sciences.

    Volume (Year): 3 (2013)
    Issue (Month): 1 (January)
    Pages: 400-408

    as in new window
    Handle: RePEc:hur:ijaraf:v:3:y:2013:i:1:p:400-408

    Contact details of provider:
    Web page: http://hrmars.com/index.php/pages/detail/Accounting-Finance-Journal

    Related research

    Keywords: Institutional owners; active institutional investors; Inactive institutional investors; conservatism;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Cornett, Marcia Millon & Marcus, Alan J. & Saunders, Anthony & Tehranian, Hassan, 2007. "The impact of institutional ownership on corporate operating performance," Journal of Banking & Finance, Elsevier, vol. 31(6), pages 1771-1794, June.
    2. Richard J. Zeckhauser & John Pound, 1990. "Are Large Shareholders Effective Monitors? An Investigation of Share Ownership and Corporate Performance," NBER Chapters, in: Asymmetric Information, Corporate Finance, and Investment, pages 149-180 National Bureau of Economic Research, Inc.
    3. Velury, Uma & Jenkins, David S., 2006. "Institutional ownership and the quality of earnings," Journal of Business Research, Elsevier, vol. 59(9), pages 1043-1051, September.
    4. Farshid Navissi & Vic Naiker, 2006. "Institutional ownership and corporate value," Managerial Finance, Emerald Group Publishing, Emerald Group Publishing, vol. 32(3), pages 247-256.
    5. Sanjeev Bhojraj & Partha Sengupta, 2003. "Effect of Corporate Governance on Bond Ratings and Yields: The Role of Institutional Investors and Outside Directors," The Journal of Business, University of Chicago Press, vol. 76(3), pages 455-476, July.
    6. Jung, Kooyul & Kwon, Soo Young, 2002. "Ownership structure and earnings informativeness: Evidence from Korea," The International Journal of Accounting, Elsevier, vol. 37(3), pages 301-325.
    7. Ball, Ray & Shivakumar, Lakshmanan, 2005. "Earnings quality in UK private firms: comparative loss recognition timeliness," Journal of Accounting and Economics, Elsevier, Elsevier, vol. 39(1), pages 83-128, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:hur:ijaraf:v:3:y:2013:i:1:p:400-408. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hassan Danial Aslam).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.