The Effect of Informatin Environment on impact of between Advertising Expenses and Stock Price Crash Risk
Subject Areas :Mahnaz Madani 1 , masood fooladi 2
1 - Esfahan-iran
2 - Assistant Prof., Department of Accounting, Shahin Shahr Branch, Islamic Azad University, Isfahan, Iran.
Keywords: Advertising expenses , Environmental uncertainty , Stock price crash risk,
Abstract :
A severe fall in the stock price is one of the most important risks of investing in the capital market. One of the most important factors affecting the risk of a fall in the stock price is advertising. As advertising only provides positive information about a company, there is a possibility that the information asymmetry between stock market investors and the company will increase, thereby increasing optimistic feelings about the company among investors, especially retail investors. increase sales This can also cause investors to ignore the bad news of the advertising company and change the company's shares. Therefore, the aim of the current research is the effect of the information environment on the intensity of the effect of product market advertising costs on the risk of falling stock prices. In order to achieve the aim of the research, a hypothesis was formulated. direction To test this hypothesis, a sample consisting of 110 companies admitted to the Tehran Stock Exchange between 2015 and 2019 was selected using the method of systematic elimination. To test the research hypothesis, a multiple regression model was used using the combined data method. The results of the research show that the intensity of advertising costs has a significant negative effect on the risk of future fall in stock prices, and environmental uncertainty (information) does not affect the relationship between the intensity of product market advertising costs and the risk of falling stock prices.
