The Effect of Information Disclosure on Bid -Ask Spread Using Simultaneous Equations System

In this article the relationship between information disclosure and Bid – Ask spread is investigated in capital market of Iran using simultaneous equations system. In order to determine the degree of information disclosure of firms, a check list based on accounting standards was prepared and the relationship between Bid-Ask spread was examined in 112 firms in 2007. For the purpose of investigating the relationship, cross-sectional method was used.As a result, a significant. reverse relationship was observed in the course of our study.