Studying the Effect of Information Asymmetry and Firm Value on the Firm Investment in Companies Listed in Tehran Stock Exchange

Subject Areas : Journal of Investment Knowledge

Zohreh Hajiha ¹ , Bahareh Moradiyan ²

1 - Department of Accounting, East Tehran Branch, Islamic Azad University, Tehran Iran
2 - Department of Accounting, Arak Branch , Islamic Azad University, Arak Iran

Received: 2014-04-24 Accepted : 2014-07-31 Published : 2014-07-31

Keywords: asymmetric information, investment, Firm Value, stock prices,

Abstract :

The purpose of this study is to explore the impact of information asymmetry on the relation between firm value and investment in 99 listed companies in Tehran Stock Exchange in the period of 2006-2011. This study seeks to answer the question whether information asymmetry exists, is there any significant relationship between firm value and investment or not. In this research Firstly, the direct relationship between firm value and investment and the interaction of firm value and information asymmetry on the investment investigated. Research method is applied research, in aspect of nature, descriptive and correlational. Results of testing hypotheses and coefficients estimated using ordinary least squares regression analysis and panel shows, the asymmetric information has a significant negative impact on the relationships between firm value and investment. Therefore in a position where information asymmetry is high, managers will make conservative estimates of market information. The information asymmetry can potentially lead to large errors or risks.