The Effect of Corporate Governance and Conservatism Mechanisms on Information Asymmetry with Structural Equation Modeling Technique in Tehran Stock Exchange

• Main Authors: Dariush Damoori, Hamid Javidan
• Format: Article
• Language: fas
• Published: Alzahra University 2018-02-01
• Series: راهبرد مدیریت مالی
• Subjects: Corporate Governance; Conservatism; Information Asymmetry; Structural Equation Technique
• Online Access: http://jfm.alzahra.ac.ir/article_3160_cdd46547cecc021a19edf5b2b64d8cc4.pdf
• ISSN: 2345-3214; 2538-1962

The purpose of this study was to investigate the effect of corporate governance and conservatism on information asymmetry. For this purpose, information about 78 companies listed in Tehran Stock Exchange during the years 2011-2015 has been studied. The structural equation technique is used to analyze the assumptions. In this research, the predictive error of profit and growth opportunities (including Q Tobin and market share to office sales) have been used as indicators of information asymmetry measurement. After confirming the acceptable fit of the measurement and structural patterns of the research, the results indicate that conservatism has a direct impact on information asymmetry and the reverse impact of corporate governance on information asymmetry. The results also show that the internal mechanisms of the corporate governance system which include the size of the board of directors, the ratio of non-executive directors to the board of directors, and the separation of the role of the managing director from the board of directors, is not asymmetrical for the companies that are accepted in  Tehran Stock Exchange. But the foreign mechanisms of the corporate governance system, which include institutional ownership, major ownership, and ownership concentration, reflect the impact of these factors on reducing information asymmetry.