The Impact of Restricted Financing on the Risk of Falling Stock Prices by Emphasizing the Moderating Role of Tax Avoidance
Subject Areas : Financial Knowledge of Securities Analysis
Marjan
Damankeshideh
1
(Department of Economy, Central Tehran Branch, Islamic Azad University, Tehran, Iran.)
Amirreza
Keyghobadi
2
(Department of Accounting, Central Tehran Branch, Islamic Azad University, Tehran, Iran)
Keywords: Financing Constraints, Risk of falling stock prices, Tax Avoidance, KZ index,
Abstract :
One of the factors that exacerbate stock price volatility is the constraint on financing, while tax avoidance facilitates the development and expansion of profit management and maintenance activities and the dissemination of negative news over a longer period of time. This news may one day be released on the market and may increase the risk of future stock price crashes. On the basis of the present study, the data of 165 active companies in Tehran Stock Exchange were examined in order to investigate the effect of restriction of financing on the risk of falling stock market prices and the role that tax avoidance can play as an intermediary variable. The research sample was selected between 2013 and 1977 and then multivariate regression of panel data model and generalized least squares (GLS) method was used to test the research hypotheses. The findings indicate that the restriction on financing has a direct impact on the risk of falling stock prices and tax avoidance can also increase the risk of falling stock prices.
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