Impact of Forward Looking Statement on the Stock Liquidity with Investor Sentiment as Mediation Variables

The objective of this research is to empirically explore the impact of forward looking statements on the stock liquidity with investor sentiment as mediation variables. The independent variable is the forward looking statement and the dependent variable is stock liquidity and investor sentiment as mediation variables. The analysis technique used is a linear multivariate regression analysis technique. Data span from 2017 to 2022 and covers manufacturing firms listed on the Tehran Stock Exchange. The findings of the research show that the forward looking statement has a significant positive effect on stock liquidity. Forward looking statements have a significant positive effect on investor sentiment. Investor sentiment has a significant positive effect on stock liquidity. Investor sentiment mediates the effect of forward-looking information on stock liquidity. The empirical findings suggest that investor sentiment can play a role as a mediating factor between the disclosure of forward-looking statements and stock liquidity. Therefore, companies should pay special attention to the management of investors' emotions and gain investors' trust by providing clear and accurate information so that they can improve the liquidity of their shares. This article expands and enriches research on forward-looking information disclosure, as well as and is a reference for regulators to develop rules and regulations and regulate forward-looking information disclosure. The association between the extent of disclosure and stock liquidity is still ambiguous. To the best of the authors’ knowledge, this study is the first to investigate the impact of forward looking statement on stock liquidity with investor sentiment as meditation.