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Information Asymmetry and Earnings Stability in Financially Insolvent Companies

Credit to Download: 1 | Page Numbers 10 | Abstract Views: 43
Year: 2016
COI code: JR_AJAER-6-2_002
Paper Language: English

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Authors Information Asymmetry and Earnings Stability in Financially Insolvent Companies

Somayeh Rashidi - Graduated from M.A, Department of Accounting, Islamic Azad University Branch of Damavand Research Science,Damavand, Iran
S.Ali Vaeez - Persian Gulf International Educational Branch, Islamic Azad University, Khorramshahr, Iran
  Mohammad Ramazan Ahmadi - Assistant Professor of Accounting, Shahid Chamran University, Ahwaz, Iran

Abstract:

The purpose of this study was to investigate the relationship between information asymmetry and theearnings stability in the financially insolvent companies listed in Tehran Stock Exchange. Earningsstability means earnings repetition in the next periods. To measure the dependent variable, i.e. earningsstability, the estimation of the future and current earnings model is used. To test the research hypothesesthe data related to 457 companies listed in Tehran Stock Exchange as the statistical sample and for theperiod of 2006-2015 have been analyzed using combinational data analysis method. In order to estimatethe appropriate models of hypotheses testing in combinational data Chow and Hausman tests were used.The research results suggest that there is a negative and significant relationship between informationasymmetry and earnings stability. There is no significant difference in the relationship betweeninformation asymmetry and earnings stability in financially insolvent companies and non-insolventcompanies. Increasing the probability of bankruptcy of the company, the relationship betweeninformation asymmetry and earnings stability does not change.

Keywords:

Information Asymmetry, Earnings Stability, Financially Insolvent Companies, Bankruptcy Risk

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COI code: JR_AJAER-6-2_002

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Rashidi, Somayeh; S.Ali Vaeez & Mohammad Ramazan Ahmadi, 2016, Information Asymmetry and Earnings Stability in Financially Insolvent Companies, Academic Journal of Accounting and Economics Researches 6 (2), https://www.civilica.com/Paper-JR_AJAER-JR_AJAER-6-2_002.htmlInside the text, wherever referred to or an achievement of this article is mentioned, after mentioning the article, inside the parental, the following specifications are written.
First Time: (Rashidi, Somayeh; S.Ali Vaeez & Mohammad Ramazan Ahmadi, 2016)
Second and more: (Rashidi; Vaeez & Ahmadi, 2016)
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