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The Impact of Information Risk on the Systematic Risk

Author

Listed:
  • Mahmoud Moeinadin
  • Forough Heirany
  • Ehsan Khoshnood

Abstract

Systematic risk is among the most significant topics and has been Longley considered by the researchers of the capital market. The final goal of the most investors, stakeholders and managers achieve the highest return. They confront risk and it is necessary to equilibrate the risk and return. Accordingly, it seems essential to investigate the risk and the related effective factors. This study seeks to find the effect of informative risk on the systematic one. Fifty two listed firms on Tehran Stock Exchange for a five year period including 2006-2010 were selected as the sample in order to test the hypotheses. Multivariate regression model has been also applied to analyze the required data. The findings reveal that there is a positive significant relationship between informative risk indicator (income smoothing) and systematic risk.

Suggested Citation

  • Mahmoud Moeinadin & Forough Heirany & Ehsan Khoshnood, 2014. "The Impact of Information Risk on the Systematic Risk," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(1), pages 90-98, January.
    • Handle: RePEc:hur:ijarbs:v:4:y:2014:i:1:p:90-98
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    References listed on IDEAS

    as
    1. Iatridis, George, 2010. "International Financial Reporting Standards and the quality of financial statement information," International Review of Financial Analysis, Elsevier, vol. 19(3), pages 193-204, June.
    2. Juan Manuel García Lara & Beatriz García Osma & Araceli Mora, 2005. "The Effect of Earnings Management on the Asymmetric Timeliness of Earnings," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(3‐4), pages 691-726, April.
    3. Fama, Eugene F. & French, Kenneth R., 1993. "Common risk factors in the returns on stocks and bonds," Journal of Financial Economics, Elsevier, vol. 33(1), pages 3-56, February.
    4. Cornett, Marcia Millon & Marcus, Alan J. & Tehranian, Hassan, 2008. "Corporate governance and pay-for-performance: The impact of earnings management," Journal of Financial Economics, Elsevier, vol. 87(2), pages 357-373, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Informative risk; Income smoothing; Earnings quality; Systematic risk; Fama and French three-factor model;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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