The Effects of Information Symmetry on the Relationship between Management Earnings Forecast and Firm Risk using Static and Dynamic approaches

Kaffashpour yazdi, Mahsa; Taftiyan, Akram; Moeinaddin, Mahmoud

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year 11, Issue 44 (2020)

fa 2020, 11(44): 144-171

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The Effects of Information Symmetry on the Relationship between Management Earnings Forecast and Firm Risk using Static and Dynamic approaches

Mahsa Kaffashpour yazdi¹

, Akram Taftiyan ^*¹

, Mahmoud Moeinaddin¹

1- Islamic Azad University, Yazd Branch

Abstract: (4216 Views)

Today, improving the information environment can lead to firm risk reduction by increasing market's transparency. Present study investigates the effect of information environment on the relationship between Management Earnings Forecast and firm risk based on static and dynamic approaches. To test in static approach, Multivariate regression with fixed effects, and in dynamic approach, Generalized Moment of Method (GMM) has been used. Using a systematic elimination method, 65 companies were selected among listed companies in Tehran Stock Exchange. Time domain research for data extraction, is years 2010 to 2019, and for data testing is 2012 to 2019. Results in both static and dynamic state indicate a reverse and significant relationship between firm risk and management earnings forecast, and in companies with stronger information environments, this relationship is lower. Also, the effect of independent variables on non-systematic risk in the dynamic approach is greater than the static approach.

Keywords: information environment, management earnings forecast, systematic risk, idiosyncratic risk, static and dynamic approaches

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Type of Study: Research | Subject: Special

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Kaffashpour yazdi M, Taftiyan A, Moeinaddin M. The Effects of Information Symmetry on the Relationship between Management Earnings Forecast and Firm Risk using Static and Dynamic approaches. fa 2020; 11 (44) :144-171
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