Corporate Governance and Cost of Equity: Evidence from Tehran Stock Exchange

• 발행기관: 한국유통과학회
• 저자명: Mahdi SALEHI Arash ARIANPOOR Tamanna DALWAI
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.7, 149~158쪽, 전체 10쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.07.30

영문 초록

The purpose of this study was to investigate the impact of corporate governance index on the cost of equity in companies listed on the Tehran Stock Exchange. This study collects data from 975 observations during the period 2012 to 2018 to test the hypotheses using multiple linear regression model for the panel data. In this research, the independent variable of corporate governance index comprises of 27 specific corporate governance attributes. The results of hypothesis testing showed that corporate governance has a negative and significant effect on the rate of capital cost. In other words, the quality of corporate governance can lower the rate of capital cost. This result suggests that, by using a powerful corporate governance system and by declining the information asymmetry (increasing transparency) and agency conflict, we would be able to enhance the quality of financial reports. It would strengthen the capital market, attract financial suppliers and investors, and absorb the required financial resources of the firm by a lower rate. The findings of the study suggest that companies are able to reduce the cost of equity by establishing strong corporate governance. This conclusion suggests the importance and effectiveness of corporate governance in the cost of equity.

목차

1. Introduction

2. Theoretical Background and Hypothesis Development

3. Methodology

4. Results

5. Discussion and Conclusion

References

키워드

Corporate Governance Corporate Governance Index Equity Cost Agency Cost Iran Agency Theory Information Asymmetry Theory