Managerial Efficiency, Adjustment Delay Stock Price and Stock Price Informational Efficiency

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Research/Original Article (دارای رتبه معتبر)
Abstract:

In fact, the timeliness of price discovery refers to the speed of information reflected in prices. There is no reason for the same reflection speed of all information related to the company in the stock price. Also, there is no reason for the same speed of discovering the stock price of all active companies in the market. The adjustment of the stock price is done so quickly that it is not possible to predict and earn additional profit through the available information. On the other hand, managers with higher ability are able to predict changes in economic conditions that can affect the company's activities. Also, in order to increase investors' confidence in the company, they provide them with more reliable information, so that information asymmetry is reduced. By reducing the information asymmetry, the stock price informational efficiency increases and the delay in the adjustment of the stock price decreases. Considering the importance of managers' efficiency, in this research, the effect of managers' efficiency on the stock prices information efficiency and the delay in stock price adjustments has been investigated. Using a sample of 113 companies accepted in the Tehran Stock Exchange and using multivariate regression to test the hypotheses, the results of the research show that increasing the managers' efficiency reduces the delay in stock price adjustment. In addition, the results showed a significant positive effect of managers' efficiency on the information efficiency of stock prices.

Language:
Persian
Published:
Judgment and Decision Making in Accounting and Auditing, Volume:2 Issue: 7, 2023
Pages:
43 to 66
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