The effect of transparency of information on the relationship between family ownership and cost of debt

Subject Areas : Journal of Investment Knowledge

Zohre Hajiha ¹ , Javad Oradi ^{2 *}

1 - The Assistant Professor of Accounting, Islamic Azad University, Tehran Branch East, Iran,
2 - M.A of Auditing, Ferdowsi University, Mashhad, Iran (corresponding author)

Received: 2017-03-01 Accepted : 2017-05-30 Published : 2018-06-22

Keywords: family ownership, cost of debt, transparency of information, Agency conflict,

Abstract :

The main purpose of this research, The effect of transparency of information on the relationship between family ownership and cost of debt for companies in Tehran Stock Exchange. Statistical population consisted of 27 family and 76 nonfamily companies of the study period of 2009 to 2016 year-on behalf. In this study using a scores of ranking system of disclosure quality and information science Tehran Stock Exchange, for the separation of firms, the firms with low and high level of information disclosure. The statistical method, used in order to test the second research hypothesis, is panel data. The results of the first hypothesis of this research showed that there is a significant positive relationship between family ownership and cost of debt. In other words, the cost of debt in family firms is higher than nonfamily firms. Then, by examining the second hypothesis, it became clear that transparency of information on the relationship between family ownership and the cost of debt has a significant negative effect. This indicates the fact that the family enterprise-level higher information transparency, cost of debt decreases.    

References:

*       حجازی، رضوان، قیطاسی، روح الله، مسجدموسوی، میرسجاد، (1391). "بررسی رابطه بین مدیریت جریان وجوه نقد و هزینۀ بدهی "، دانش حسابداری، دوره سوم، ش 10، ص 136-117.

*       خواجوی، شکرالله، اعتمادی جوریابی، مصطفی، منفرد مهارلویی، محمد، منصوری، شعله، (1392). " مالکیت خانوادگی، ترکیب هیأت­مدیره و کیفیت گزارشگری مالی شرکت­های پذیرفته شده در بورس اوراق بهادار تهران"، حسابداری مالی، دوره پنجم، ش 19، ص 136-110.

*       طالب­نیا، قدرت­الله، پهلوان، سمیرا، (1394). " بررسی رابطه بین شفافیت سود و هزینه سرمایه مورد انتظار شرکت ها در بورس اوراق بهادار تهران"، مطالعات حسابداری و حسابرسی، دوره چهارم، ش 15، ص 43-28.

*       مهرآذین، علیرضا، قبدیان، بشیر، فروتن، امید، تقی پور، محمد، (1392). " مالکیت خانوادگی، غیر خانوادگی شرکت­ها و مدیریت سود"، دانش حسابرسی، دوره سیزدهم، ش 14، ص 171-153.

*       مهرآذین، علیرضا، مسیح­آبادی، ابولقاسم، دهنوی، محمدعلی، (1391). "شفافیت اطلاعاتی و محتوای اطلاعاتی سود"، دانش حسابداری، دوره سوم، ش 8، ص 130-113.

*       مهرانی، کاوه، پروائی، اکبر، (1393). "کیفیت افشا در شرکت­های خانوادگی پذیرفته­شده در بورس اوراق بهادار تهران"، بررسی­های حسابداری و حسابرسی، دوره بیست و یکم، ش 4، ص 540-527.

*       موسوی شیری، محمد، صالحی، مهدی، شرف دوست، فاطمه، (1394). " مالکیت خانوادگی، غیرخانوادگی و هزینه نمایندگی"، مطالعات حسابداری و حسابرسی، دوره چهارم، ش 19، ص 31-16.

*       نمازی، محمد، محمدی، محمد، (1389). " بررسی کیفیت سود و بازده شرکت­های خانوادگی و غیرخانوادگی پذیرفته شده در بورس اوراق بهادار تهران"، مجله پیشرفت­های حسابداری، دوره دوم، ش 2، ص 194-159.

*       Achleitner, A., Gunther, N., Kaserer, C., & Siciliano, G. (2014). Real earnings management and accrual-based earnings management in family firm. European Accounting Review, 23, 431–461.

*       Anderson, R., and D. Reeb. (2003). Founding-family ownership and firm performance: Evidence from the S&P 500. Journal of Finance 58: 1301–1328.

*       Anderson, R., Duru, A., & Reeb, D. (2009). Founders, heirs, and corporate opacity in the United States. Journal of Financial Economics, 92, 205–222.

*       Anderson, R., Mansi, S., & Reeb, D. (2003). Founding family ownership and the agency cost of debt. Journal of Financial Economics, 68, 263–285.

*       Armstrong, C. S., Guay, W. R., & Weber, J. P. (2010). The role of information and financial reporting in corporate governance and debt contracting. Journal of Accounting and Economics, 50, 179–234.

*       Aslan, H,. Kumar,P,. (2012). Strategic Ownership Structure and the Cost of Debt. The Review of Financial Studies / v 25 n 7.

*       Burkart, M., Panunzi, F., & Shleifer, A. (2003). Family firms. The Journal of Finance, 58, 2167–2202.

*       Bushman, R. M., & Smith, A. (2001). Financial accounting information and corporate governance. Journal of Accounting and Economics, 32, 237–333.

*       Chen, S., X. Chen, and Q. Cheng. (2008). Do family firms provide more or less voluntary disclosure? Journal of Accounting Research 46 (3): 499–536.

*       Claessens, S., Djankov, S., Fan, J. P. H., & Lang, L. H. P. (2002). Disentangling the incentive and entrenchment effects of large shareholdings. The Journal of Finance, 57, 2741–2771.

*       Ellul, A., Guntay, L., & Lel, U. (2007). External governance and debt agency costs of family firms (Federal Reserve International Finance Discussion Paper No. 908).

*       Faccio, M., Lang, L. and Young, L. (2001), Dividends and expropriation”, American Economic Review, Vol. 91 No. 1, pp. 54-78.

*       Gersick, K. E., Davis, J. A., McCollom, H. M., & Lansberg, I. (1997). Generation to generation: Life cycles of the family business. Boston:Harvard Business School Press.

*       Greene, W. (2011). Econometric Analysis. Seventh ED. United states of America: Prentice-hall publication.

*       Jensen, M., & Meckling, W. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3, 305–360.

*       Liangbo M, Shiguang M & Gary T,.(2015). Corporate Opacity and Cost of Debt for Family Firms. European Accounting Review, 58, 1-34.

*       Lin, C., Ma, Y., Malatesta, P., & Xuan, Y. (2011). Ownership structure and the cost of corporate borrowing. Journal of Financial Economics, 100, 1–23.

*       Pittman, J. A., & Fortin, S. (2004). Auditor choice and the cost of debt capital for newly public firms. Journal of Accounting and Economics, 37, 113–136.

*       Wang, D. (2006). Founding family ownership and earnings quality. Journal of Accounting Research, 44, 619–656.

*       Watts, R. L., & Zimmerman, J. L. (1986). Positive accounting theory. Upper Saddle River, NJ: Prentice Hall.

*       Wu, Zhenyu, Chua Jess H. and James J. Chrisman. (2007). Effects of Family Ownership and Management on Small Business Equity Financing. Journal of Business Venturing, 22: 875-895.

*      Nieves, L, D,.; Pedro J. G-T; Pedro M-S  (2016). Debt maturity structure in private firms: Does the family control  matter? Journal of Corporate Finance,. V, 37, pp. 393–411