The Impact of Real Earning Management on Investors' Asymmetric Perceptions in the Capital Market: Examination of the moderating role of Excess Stock Price Volatility

Subject Areas : Journal of Investment Knowledge

Leila Zamanianfar ¹ , Bahman Banimahd ² , zahra dianati dalami ³

1 - Ph.D. Student in Accounting, Department of Accounting, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran.
2 - Associate Professor of Department of Accounting, Faculty of Management and Accounting, Karaj Branch, Islamic Azad University, Karaj, Iran.
3 - Associate Professor of Department of Accounting, Faculty of Financial Sciences, Kharazmi University, Tehran, Iran.

Received: 2019-09-22 Accepted : 2020-01-08 Published : 2021-12-22

Keywords: Real Earning Management, Excess Stock Price Volatility, Investors' Asymmetric Perceptions,

Abstract :

Investors' perceptions in the capital market will not only influence individual decision-making and the allocation of monetary resources to the investment on corporate stocks, but also affect the total capital market. Investors' asymmetric perceptions are not usually influenced by one measure because of the extent of the expansion, but in a general segmentation it can be attributed to macroeconomic dimensions and industry-level criteria. The purpose of this study is to investigate the impact of real earning management on the investors' asymmetric perceptions in the capital market with regard to the moderating role of Excess Stock Price Volatility. In this study, 102 companies in Tehran stock exchange that were selected through systematic elimination sampling were evaluated in the period of 2015 -2019. Logistic regression was used because of the biased measurement of the dependent variable of this study, namely investors' asymmetric perceptions.The results showed that real earnings management has a significant positive effect on investors' asymmetric perceptions. It was also found that Excess Stock Price Volatility intensifies the positive impact of real earnings management on investors' asymmetric perceptions.

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