Accounting disclosure and Future performance: Structural equation approach

This paper examines the relationship between accounting disclosure and corporate future performance. To this end, 140 companies listed in Tehran Stock Exchange for the period 2008-2013 were selected as samples. Structural equation modeling was used to measure the performance measure and using confirmatory factor analysis, latent variables profitability and market-growth were measured by eight observable performance measured. In order to examine the research hypothesis, two separate models were estimated using ordinary least squares (OLS) and the only difference between models was the dependent variable. The measure of performance in the first model is profitability and in the second model is market-growth. For both models, the findings indicate a significant positive relationship between disclosure quality variable and the future performance and so the research hypothesis (Information transmission hypothesis) was confirmed.