International Journal of Financial Management

2013 | Volume 3 | Issue Issue 3

The Investigation of the Impact of Conditional and Unconditional Conservatism on Agency Cost in Tehran Stock Exchange

1. Saeid Jabbarzadeh Kangarlouei – Islamic Azad University, Iran

2. Nasib Agazadeh Soltan Ahmadi – Islamic Azad University, Iran

3. Morteza Motavassel – Islamic Azad University, Iran

Received
- 		Accepted
- 		Published
25-Aug-2013
Abstract
The aim of this study is to investigate the relationship between conservatism and agency costs in firms listed in Tehran Stock Exchange (TSE). To do so, a sample of 588 firms is selected as research sample for the period of 2004-2010 and fixed effect regression model is used to test hypotheses. C- i¡¡ score index is used to measure unconditional conservatism and Ball and Shivakumar (2005) model to measure conditional conservatism. Multiplying Tobin’s Q by free cash flow is considered a proxy for agency cost as independent variable. The results show that conditional conservatism has a negative and significant impact on agency cost while unconditional conservatism has a positive and significant impact.
Keywords Conditional Conservatism, Unconditional Conservatism, Agency Costs
Locked
Subscribed
Open Access
Open Access
Articles Journal Info Editorial Board Guidelines Pricing Info Peer Review & Publication Policy Submit Manuscript