Evaluate the stock market performance of companies based on uncertainty in the internal information environment and behavioral biases

Subject Areas : Journal of Investment Knowledge

reza  aghaha ¹ (Ph.D. Student in Accounting, Department of Accounting, Qazvin Branch, Islamic Azad University, Qazvin, Iran.)
sina  kherdyar ² (Assistant Professor of Accounting, Rasht Branch, Islamic Azad University, Rasht, Iran.)
Farzin  Rezaei ³ (Associate Professor of Accounting. Faculty member Of Qazvin Islamic Azad University)
fadhel  mohamadi node ⁴ (Assistant Professor, Department of Management, Faculty of Humanities, Islamic Azad University, Lahijan Unit, Lahijan, Iran)

Received: 2021-02-12 Accepted : 2021-07-24 Published : 2021-12-22

Keywords: Equity Cost, Behavioral Biases, internal information environment, company value,

Abstract :

Uncertainty due to environmental changes, limited resources and higher profits have made planning a necessary necessity. For this reason, recognizing and analyzing the internal environment is very important for directing the resources of organizations. Understanding the internal environment of the organization in practice means determining the strategic strengths and weaknesses of the organization, which is possible through the identification and evaluation of internal strategic factors. The purpose of this study is to evaluate the stock market performance of companies based on uncertainty in the internal information environment and behavioral bias. To test the hypotheses, the information of 84 companies listed on the Tehran Stock Exchange in the period between 1397-1391 has been used. The results showed that there was a positive and significant relationship between managers 'distrust and corporate value, but there was a negative and significant relationship between managers' distrust and corporate equity costs. Had. The results showed that there is a positive and significant relationship between managers' pessimism and information prominence and the cost of equity of companies, respectively. Uncertainty in the internal information environment weakens the relationship between managers 'distrust and corporate value, but internal information uncertainty strengthens the relationship between managers' pessimism about stock market performance and information prominence with corporate value. But uncertainty in the internal information environment undermines the relationship between information prominence and the cost of corporate equity.

References:

• اثنی عشری، حمیده و ولی­زاده لاریجانی، اعظم.(1397). رفتار ریسک­پذیر طی چرخه عمر شرکت و اثر آن بر عملکرد مالی آتی به روش گشتاورهای تعمیم یافته(GMM)، پژوهش­های حسابداری مالی، شماره اول، سال دهم، صص 18-1.


• تائبی نقندری، امیرحسین و تائبی نقندری، علی و عباس­زاده، مهری. (1396). تاثیر تعدیل­گری اندازه شرکت بر رابطه بین حاکمیت شرکتی و عملکرد اقتصادی شرکت­ها. مجله دانش حسابداری، دوره 8، شماره 1، صص 182-155.


• تیموری جامی، یاسمن و شاهچرا، مهشید و حسن­زاده، علی. (1393). بررسی تاثیر عملکرد شرکت بر رابطه­ی بین رقابت در بازار محصول و رتبه نظام راهبری شرکتی. فصلنامه تحقیقات توسعه اقتصادی، شماره سیزدهم، صص48-25.


• جعفری، ابوالفضل و دولتی، نیکو. (1386). مقدمه­ای بر مالی و اقتصاد رفتاری، ماهنامه­ی بورس، شماره 68، صص17-10.


• خالقی کسبی، پروانه. (1397). تاثیر افزایش کیفیت اطلاعات حسابداری بر کاهش پدیده برجستگی، رساله دکتری حسابداری، دانشگاه آزاد اسلامی قزوین.


• درخشنده، سیدهادی و علی احمدی، سعید. (1396). بررسی ارزیابی نقش باورهای سرمایه گذاران بر جهت گیری قیمت و حجم معاملات در بازار سرمایه. دانش مالی تحلیل اوراق بهادار. سال 10. شماره 33. صص 51-63.


• رضایی، فرزین و موسوی، سید احمد و شاه ویسی، فرهاد (1395). تبیین الگوی ایفای مسئولیت پذیری اجتماعی شرکت ها و تأثیر آن بر خصوصیات کیفی اطلاعات مالی، مجله حسابداری مدیریت، سال دهم، شماره سی و سه، صص 108-89.


• زندی، احمد و شمس­زاده، باقر. (1392). تاثیر ارائه مجدد صورت­های مالی بر ریسک اطلات، دانش حسابرسی، سال سیزدهم، شماره پنجاه و یکم، صص 21-1.


• فرازیانی، فاتح. (1397). تدوین مدل تورش­های رفتاری سرمایه­گذاران در ورزش استان کرمانشاه، مطالعات مدیریت رفتار سازمانی در ورزش، دوره پنجم، شماره بیستم، صص 52-45.


• فلاح­پور، سعید و عبداللهی، غلامرضا. (1390). شناسایی و وزن­دهی تورش­های رفتاری سرمایه­گذاران در بازار بورس اوراق بهادار تهران: رویکرد AHP فازی، نشریه تحقیقات مالی، دوره سیزدهم، شماره سی و یکم، صص 120-99.


• قالیباف اصل، حسن، پورداداش مهربانی، نازیلا و دهقان نیری، لیلا. (1394). بررسی رابطه میان ریسک گریزی مدیرران و عملکرد نهادهای مالی در بازار سرمایه. راهبرد مدیریت مالی. سال 3. شماره 10. صص 1-23.


• کریمی, کیانا و رهنمای رودپشتی, فریدون. (1394). تورش‌های رفتاری و انگیزه‌های مدیریت سود، دانش حسابداری و حسابرسی مدیریت، سال چهارم، شماره چهارده، صص 31-15.


• مهرگان، محمدرضا؛ دلشاد، افسانه. (1396). بررسی تأثیر تغیر نگرش مدیریت از بیش­اطمینانی به مدیریت منطقی بر بازده سهام. دانش حسابداری مالی، دوره چهارم، شماره 2، صص 26-1.


• هاشمی، سیدعباس و امیری، هادی و افیونی، علیرضا. (1396). بررسی نوسانات جریان­های نقدی عملیاتی بر سرمایه­گذاری شرکت­ها با در نظر گرفتن محدودیت تامین مالی، دانش حسابداری، دوره هشتم، شماره اول، صص 49-29.

 

• Alexeev, V., Urga, G., Yao, W. (2019). Asymmetric jump beta estimation with implications for portfolio risk management, International Review of Economics and Finance, 10, 50-98.


• Baccar, A., Ben-Mohamed, E., and A. Bouri (2013). “Managerial Optimism, Overconfidence and Board Characteristics: Toward a New Role of Corporate Governance”, Australian Journal of Basic and Applied Sciences, Vol. 7, No. 7, 287-301.


• Bhatia, A. Chandani, A. and Chhateja, J.(2020). Robo advisory and its potential in addressing the behavioral biases of investors – A qualitative study in Indian context. Journal of Behavioral and Experimental Finance, doi: https://doi.org/10.1016/j.jbef.2020.100281.


• Bordalo, P, Gennaioli, N, and Shleifer, A. (2012). Salience Theory of Choice under Risk, Quarterly Journal of Economics. 127 (3):pp. 1243–1285.


• Boulton, T.J & Campbell, T.C. (2016). Managerial Confidence and Initial Public Offerings. Journal of Corporate Finance, No. 37, 375-392.


• Birnberg, J, G; (2011). A Proposed Framework for Behavioral Accounting Research, BEHAVIORAL RESEARCH IN ACCOUNTING, Vol. 23, No. 1, pp. 1–43.


• Cai, J., Y. Liu, Y. Qian, & M. Yu. (2015) Information Asymmetry and Corporate Governance, Quarterly Journal of Finance, vol. 05, issue 03, pp. 1-32.


• Carver, C. S., Scheier, M. F., & Segerstrom, S. C. (2010). Optimism. Clinical Psychology Review, 30, 879-889.


• Cheng, C.S.A., & Sh. Li. (2014). Does Income Smoothing Improve Earnings in formativeness? A Comparison between the US and China Markets. China Accounting and Finance Review, 16 (2): pp. 128-147.


• Dhaoui, AB., Khraief, N. (2014). Sensitivity of Trading Intensity to Optimistic and Pessimistic Beliefs. Arab Economics and Business Journal, 9,pp. 115-132.


• Duellman, S., H. Hurwitz, and Y. Sun. (2015). Managerial overconfidence and audit fees, Journal of Contemporary Accounting & Economics, 11(2), pp. 148-165.


• Frank, M., & V. Goyal. (2003). Testing the Pecking Order Theory of Capital Structure. Journal of Financial Economics, 67: pp.217–248.


• Garcia, C., Saravia, J., and D. Yepes. (2016). The Weighted Average Cost of Capital Over the Life-Cycle of the Firm: Is the Overinvestment Problem of Mature Firms Intensified by a Higher WACC? Research in Economics and Finance (CIEF), pp. 15-21.


• Guy, D.F., Richard, A.S., & Arindam, T. (2016). Firm Strategy and Market Reaction to Earnings. Advances in Accounting, Incorporating Advances in International Accounting, 33, 20–34.


• Habib, A., Monzur Hasan, M. (2017). Firm Life Cycle, Corporate Risk-Taking and Investor Sentiment, Accounting and Finance, Vol.57, No.2, pp. 465–497.


• Hoffmann, A. O., Post, T., & Pennings , J. M. (2015). How investor perceptions drive actual trading and risk-taking behavior, Journal of Behavioral Finance, 16(1), pp. 94-103.


• Huang, Z, &,Kun, W. (2011). Ultimate privatization and change in firm performance: Evidence from China, China Economic Review, vol. 22(1), pages 121-132.


• Judge, T. A., & Robbins, S. P. (2017). Essentials of organizational behavior 14th edition. Published by Pearson. pp 1-285.


• Kahneman, D and Riep, M, W. (1998).Aspects of Investor Journal of Portfolio Management, 24 (4), 52-65; DOI: https://doi.org/10.3905/jpm.1998.409643


• Kim, J.B., Wang, Z., & Zhang, L. (2016). CEO Overconfidence and Stock Price Crash Risk, Contemporary Accounting Research. 33, (4), pp. 1720-1749.


• McLaughlin, R., A. Safieddine, & G.K. Vasudevan. (1998). The Information Content of Corporate Offerings of Seasoned Securities: An Empirical Analysis, Financial Management, 27(2): pp. 31-45.


• Mefteh Rekik,Y., Boujelbene, Y.(2013). Determinants of Individual Investors’ Behaviors: Evidence from Tunisian Stock Market, Journal of Business and Management, Volume 8, Issue 2, pp 109-119.


• Ohlson J. , Juettner-Nauroth B. (2003). Expected EPS and EPS growth as determinants of value, Review of Accounting Studies, 10 (2):pp. 349-365.


• Oprean C. (2014). Effect of behavioural factor on human finance decisions, Economic and finance, 16, pp. 458-463.


• Park, Y., Chen, K.)2006(. The effect of accounting conservatism and lifecycle stages on firm valuation. Journal of Applied Business Research, 22(3), pp. 75-92.


• Pompian, Michael M., (2011). Behavioral Finance and Wealth Management: How to Build optimal Portfolios That Account For Investor Biases, John Wiley & Sons, Ltd.


• Ridley, R. J., (2008), Social Enterprise as a Socially Rational Business, International Journal of Entrepreneurial Behaviour and Research, 14 (5): pp. 291–312.


• Schrand, C. M., and S. L. Zechman. (2012). Executive overconfidence and the slippery slope to financial misreporting. Journal of Accounting and Economics 53(1): 311-329.


• Shahzad, F., Lu, J., & Fareed, Z, (2019). Does firm life cycle impact corporate risk taking and performance?, Journal of Multinational Financial Management, vol. 51(C), pp. 23-44.


• Skala, D. (2008). Overconfidence in psychology and finance-an interdisciplinary literature review, Bank iKredyt, 33-50.


• Tien-Shih, H., Bedard, J.C. & Johnstone, K.M. (2014). CEO Overconfidence and Earnings Management During Shifting Regulatory Regimes. Journal of Business Finance & Accounting, No. 41(9 & 10), 1243-1268.


• Tunyi AA, Agyei-Boapeah H, Areneke G, Agyemang J. (2019). Internal capabilities, national governance and performance in African firms, Research in International Business and Finance (2019), https://doi.org/10.1016/j.ribaf.2019.04.009


• Vitanova, I. (2019). Nurturing overconfidence: The relationship between leader power, overconfidence and firm performance, The Leadership Quarterly,NO. 10. pp. 1-14.


• Zhu, B., & Niu, F. (2016). Investor sentiment, accounting information and stock price: Evidence from Pacific-Basin Finance Journal, 38 (3), pp. 125-134.