Assessing the moderating role of corporate governance system on the relationship between investors' emotional tendencies and changes in stock returns of companies listed on the Tehran Stock Exchange

Subject Areas : Financial Knowledge of Securities Analysis

Elham Farokhi ¹ , Saeid Jabbarzadeh ²

1 - Ph.D. Student, Department of Accounting, Faculty of Humanities, Urmia Branch, Islamic Azad University, Urmia, Iran.(Corresponding Author)
2 - Associate Prof., Department of Accounting, Faculty of Humanities, Urmia Branch, Islamic Azad University, Urmia, Iran

Received: 2022-05-14 Accepted : 2022-09-19 Published : 2023-02-20

Keywords: Stock Returns, Behavioral Biases, investor sentiment, Institutional shareholders, optimism, pessimism,

Abstract :

Some studies have shown that investors' emotions can influence their financial and investment decisions, as well as stock returns; On the other hand, stock risk can also affect this relationship; Therefore, the present study has examined the moderating role of corporate governance system on the relationship between investors' emotional tendencies and changes in stock returns of companies listed on the Tehran Stock Exchange.In this study, the independent variable is investors 'feelings and the dependent variable is stock return fluctuations. To test the research hypotheses, the research model estimation method in the form of panel data and analysis based on the model of fixed effects and random effects by Eviews software based on composite data has been used. The sample includes 139 companies listed on the Tehran Stock Exchange in the period 1394-1399, which have been selected by a systematic elimination method. Findings showed that there is a significant relationship between investors' emotional tendencies and fluctuations in stock returns. Also showed that the variable of institutional shareholders can moderate the relationship between investors' emotional tendencies and fluctuations in returns.

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