Experimental test of the effect of uncertainty in external information environment due to stock return volatility on the relationship between cost-income matching and stock price concurrency

Environmental uncertainty exposes the company to an unpredictable environment and causes many fluctuations in the performance of companies. The purpose of this study is to investigate the effect of uncertainty in the external information environment due to fluctuations in stock returns on the relationship between the principle of conformity and stock price synchronicity. The research sample includes 158 companies listed on the Tehran Stock Exchange, which includes a period of 5 years from the beginning of 2014 to the end of 2018 in two groups of companies with high and low degree of compliance. The results show that in the group of companies with a high degree of compliance, uncertainty in the external information environment due to fluctuations in stock returns reduces the synchronization of stock prices. Also in the group of companies with a low degree of compliance, uncertainty in the external information environment due to fluctuations in stock returns increases the synchronization of stock prices. In general, it can be concluded that by observing the principle of compliance as much as possible, the amount of information uncertainty decreases. With the improvement of the information environment, the ability of stock prices to reflect more company-specific information increases, and if investors have easy and cheap access to company-specific information, they will be content with company-specific information more than industry / market information. Provides a reduction in stock price concurrency.