Investigation the relationship between competitors financial position in the product market and the quality of information disclosure

Document Type : Original Article

Authors

1 Associate Professor of Accounting, Payame Noor University, Tehran, Iran

2 Accounting, Faculty of Accounting and Management, Islamic Azad University, Mashhad Branch

3 Master Student of Accounting at Islamic Azad University, Mashhad Branch, Iran

10.22034/iaas.2020.128134

Abstract

The main purpose of the present research is to study the relationship between financial position of competitors in the product market and the quality of information disclosure in companies which are member in Tehran Stock Exchange. The research also examines the interactive effects of company size, company profitability, and the percentage of institutional stockholders on the relationship between the financial position of competitors in the product market and the quality of information disclosure. The dependent variable of research, the quality of information disclosure and independent variables include the financial position of the company in the product market relative to the industry's competitors, the interactive effect of the company size with the financing limit, the interactive effect of profitability with the financing limit and the interactive effect of the percentage of institutional stockholders with the financing limit. To test the research hypotheses, the historical data of 1390-1395, as for 75 companies accepted in Tehran Stock Exchange and the panel regression analysis were used. The results of the research show that the greater the company's financial constraints become, the more the disclosure of information decreases. Indeed, increasing in debt and the consequent lack of competitive ability of the company, disclosure of information is reduced. The results also indicate that company size and profitability have been able to affect the relationship between high financial constraints and the quality of information disclosure, while the percentage of institutional stockholders has no effect on the relationship between high financial constraints and disclosure quality.

Keywords

Accounting and Auditing Studies
Volume 9, Issue 36
January 2021
Pages 27-42

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