IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v15y2022i12p577-d992765.html
   My bibliography  Save this article

The Role of Corporate Governance in Investment Efficiency and Financial Information Disclosure Risk in Companies Listed on the Tehran Stock Exchange

Author

Listed:
  • Samira Moghaddamzadeh Kashani

    (Department of Accounting, Payame Noor University (PNU), Tehran 9395-4697, Iran)

  • Mahmoud Mousavi Shiri

    (Department of Accounting, Payame Noor University (PNU), Tehran 9395-4697, Iran)

Abstract

This study’s primary purpose is to investigate corporate governance’s role in investment efficiency and financial information disclosure risk in companies listed on the Tehran Stock Exchange. A multivariate linear regression model based on the panel data model was used to test the research hypotheses. The results of the survey of 140 companies listed on the Tehran Stock Exchange from 2015 to 2021 indicate that investment efficiency has increased by increasing the quality of corporate governance. In addition, research findings show that improving the quality of corporate governance reduces the risk of financial information disclosure. The life cycle and firm size were used to evaluate the robustness of the results obtained in this study. It was observed that improving corporate governance in companies in the stages of growth and maturity increases investment efficiency and reduces the financial information disclosure risk. In contrast, in companies that are in the decline stage, it reduces investment efficiency and increases the risk of financial information disclosure. In terms of firm size, it was also observed that, in small firms, as corporate governance increases, investment efficiency decreases, and the risk of financial information disclosure increases. However, investment efficiency and financial information disclosure reduce risk by improving large companies’ corporate governance.

Suggested Citation

  • Samira Moghaddamzadeh Kashani & Mahmoud Mousavi Shiri, 2022. "The Role of Corporate Governance in Investment Efficiency and Financial Information Disclosure Risk in Companies Listed on the Tehran Stock Exchange," JRFM, MDPI, vol. 15(12), pages 1-22, December.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:12:p:577-:d:992765
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/15/12/577/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/15/12/577/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jacoby, Gady & Liu, Mingzhi & Wang, Yefeng & Wu, Zhenyu & Zhang, Ying, 2019. "Corporate governance, external control, and environmental information transparency: Evidence from emerging markets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 58(C), pages 269-283.
    2. Antounian, Christelle & Dah, Mustafa A. & Harakeh, Mostafa, 2021. "Excessive managerial entrenchment, corporate governance, and firm performance," Research in International Business and Finance, Elsevier, vol. 56(C).
    3. Nguyen, Quang Khai, 2022. "Audit committee structure, institutional quality, and bank stability: evidence from ASEAN countries," Finance Research Letters, Elsevier, vol. 46(PA).
    4. Ulrike Malmendier & Geoffrey Tate & Jon Yan, 2011. "Overconfidence and Early‐Life Experiences: The Effect of Managerial Traits on Corporate Financial Policies," Journal of Finance, American Finance Association, vol. 66(5), pages 1687-1733, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cai, Qihai & Jiang, Fangxin & Lei, Pengfei, 2024. "Evaluating the synergistic effects of the digital economy and carbon emission trade exchange on enterprise high-quality development," International Review of Economics & Finance, Elsevier, vol. 95(C).
    2. Li, Quan & Sun, Haodan & Tao, Yunqing & Ye, Yongwei & Zhan, Kaiyan, 2023. "The fault-tolerant and error-correction mechanism and capital allocation efficiency of state-owned Enterprises in China," Pacific-Basin Finance Journal, Elsevier, vol. 80(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Insoo Cho & Peter F. Orazem, 2021. "How endogenous risk preferences and sample selection affect analysis of firm survival," Small Business Economics, Springer, vol. 56(4), pages 1309-1332, April.
    2. Adamopoulou, Effrosyni & Olivieri, Elisabetta & Triviza, Eleftheria, 2024. "Eating habits, food consumption, and health: The role of early life experiences," European Economic Review, Elsevier, vol. 166(C).
    3. Nadiah Amirah Nor Azhari & Suhaily Hasnan & Zuraidah Mohd Sanusi, 2020. "The Relationships Between Managerial Overconfidence, Audit Committee, CEO Duality and Audit Quality and Accounting Misstatements," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(3), pages 18-30, June.
    4. Huang, Ronghong & Tan, Kelvin Jui Keng & Faff, Robert W., 2016. "CEO overconfidence and corporate debt maturity," Journal of Corporate Finance, Elsevier, vol. 36(C), pages 93-110.
    5. King, Timothy & Srivastav, Abhishek & Williams, Jonathan, 2016. "What's in an education? Implications of CEO education for bank performance," Journal of Corporate Finance, Elsevier, vol. 37(C), pages 287-308.
    6. repec:zbw:bofitp:2020_015 is not listed on IDEAS
    7. Enkhtaivan, Bolortuya & Davaadorj, Zagdbazar, 2021. "Do they recall their past? CEOs’ liquidity policies across firms as they switch jobs," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    8. Weifeng Xu & Qingsong Ruan & Chang Liu, 2019. "Can the Famous University Experience of Top Managers Improve Corporate Performance? Evidence from China," Sustainability, MDPI, vol. 11(24), pages 1-20, December.
    9. Aizenman, Joshua & Noy, Ilan, 2015. "Saving and the long shadow of macroeconomic shocks," Journal of Macroeconomics, Elsevier, vol. 46(C), pages 147-159.
    10. Wang, Xu & Deng, Shengliang & Alon, Ilan, 2021. "Women executives and financing pecking order of GEM-listed companies: Moderating roles of social capital and regional institutional environment," Journal of Business Research, Elsevier, vol. 136(C), pages 466-478.
    11. Edika Quispe-Torreblanca & David Hume & John Gathergood & George Loewenstein & Neil Stewart, 2023. "At the Top of the Mind: Peak Prices and the Disposition Effect," Discussion Papers 2023-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    12. Cook, Douglas O. & Chowdhury, Jaideep & Zhang, Weiwei, 2023. "Director optimism and CEO equity compensation," Journal of Empirical Finance, Elsevier, vol. 72(C), pages 143-162.
    13. Liwei Shan & Albert Tsang & Xiaoxue Zhang, 2024. "Transporting Audit Quality Across Countries: Returnee CEOs and Audit Fees," Journal of Business Ethics, Springer, vol. 192(4), pages 845-874, July.
    14. Guillermo Cruces & Martín A. Rossi & Ernesto Schargrodsky, 2023. "Dishonesty and Public Employment," American Economic Review: Insights, American Economic Association, vol. 5(4), pages 511-526, December.
    15. Jin, Miao & Liu, Yu-Jane & Meng, Juanjuan, 2019. "Fat-finger event and risk-taking behavior," Journal of Empirical Finance, Elsevier, vol. 53(C), pages 126-143.
    16. Gopalan, Radhakrishnan & Gormley, Todd A. & Kalda, Ankit, 2021. "It’s not so bad: Director bankruptcy experience and corporate risk-taking," Journal of Financial Economics, Elsevier, vol. 142(1), pages 261-292.
    17. Takanori IDA & Ryo OKUI, 2019. "Can information alleviate overconfidence? A randomized experiment on financial market predictions," Discussion papers e-19-005, Graduate School of Economics , Kyoto University.
    18. Bharati, Rakesh & Doellman, Thomas & Fu, Xudong, 2016. "CEO confidence and stock returns," Journal of Contemporary Accounting and Economics, Elsevier, vol. 12(1), pages 89-110.
    19. Elyasiani, Elyas & Zhang, Ling, 2015. "CEO entrenchment and corporate liquidity management," Journal of Banking & Finance, Elsevier, vol. 54(C), pages 115-128.
    20. Ampofo, Akwasi A. & Barkhi, Reza, 2024. "The impact of CEO power and ethical corporate citizenship on firms’ outcomes," Research in International Business and Finance, Elsevier, vol. 67(PA).
    21. Wen, Chufu & Zhao, Xinyu & Xu, Longhao & Yin, Hua, 2023. "Military experience and household stock market participation: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 86(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:15:y:2022:i:12:p:577-:d:992765. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.