Opaque Information, Deviation from Target Leverage and Speed of Adjustment
Journal Title: Communications in Nonlinear Analysis - Year 2019, Vol 4, Issue 2
Abstract
Information opacity leads to information asymmetry. In this situation, in providing their own financial needs, firms face limitations and inevitably provide their financial needs from the debt market by signalling private information to it. In addition, information opacity affects the leverage adjustment speed. This research investigates the effect of information opacity on deviation from target leverage and its’ adjustment speed during 2003 - 2017 in 131 firms listed in Tehran Stock Exchange. To estimate the research models, we use the regression analysis with panel data approach, the approach to control the effects of years and industries and the generalized method of moments with system estimator (system GMM). The research results show that the increase in information opacity increases (decreases) the positive (negative) deviation from target leverage. Also, research findings indicate that the increase in information opacity decreases the adjustment speed.
Authors and Affiliations
Abbas Aflatooni, Kefsan mansouri
Keywords
Related Articles
- EP ID EP648746
- DOI 10.22034/AMFA.2019.585872.1191
- Views 84
- Downloads 0
Application of Mathematics in Financial Management
The Time Value of Money is a important concept in Financial Management. The Time Value of Money includes the concepts of future value and discounted value or present value. In the present article, the basic notions and i...
The Integration of Multi-Factor Model of Capital Asset Pricing and Penalty Function for Stock Return Evaluation
One of the main concerns of investors is the evaluation of the return on investment, which is conducted using various models such as the CAPM (single-factor model), Fama-French three/five-factor models, and Roy and Shiji...
An Analysis of the Repeated Financial Earthquakes
Since the seismic behavior of the earth’s energy (which follows from the power law distribution) can be similarly seen in the energy realized by the stock markets, in this paper we consider a statistical study for compar...
Confidence Interval for Solutions of the Black-Scholes Model
The forecast is very complex in financial markets. The reasons for this are the fluctuation of financial data, Such as Stock index data over time. The determining a model for forecasting fluctuations, can play a signific...
Management Demographic Characteristics, Auditor Choice and Earnings Quality: Empirical Evidence from Iran
Recent accounting and management literature shows that demographic character-istics of top management and corporate performance are related. Accordingly, using a two-stage least squares regression model (2SLS), this stud...