A Study on the Relationship between Social Responsibility, Earnings Transparencyand Stock Price Crash Risk in Listed Corporates on Tehran Stock Exchange

Stock price crash is a phenomenon in which the stock price suffers a severe and abrupt negativeadjustment. One of the most important ways to manipulate accounting information is to accelerate theidentification of good news versus delaying the recognition of bad news in earnings. However, there isalways a final level of accumulation of bad news in the corporate and reaching the final level, the badnews will be published all at once. This leads to a fall in stock prices of the corporate. The mainobjective of this study is to investigate the relationship between social responsibility, earningstransparency and stock price crash risk in listed corporates on Tehran Stock Exchange. The studiedsample of this research includes 95 listed corporates on Tehran Stock Exchange from 2009 to 2013.Multivariate regression is used to test the hypotheses of this study. The overall results of the researchindicate that there is a negative significant relationship between social responsibility, earningstransparency, and crash risk. That is to say, the more the social responsibility and earnings transparencyincrease, the less the crash risk will be.

Keywords:

Social Responsibility , Earnings Transparency , Stock Price Crash Risk