Examining the relationship between corporate transparency and financial constraints of Listed Companies in Tehran Stock Exchange

Abstract

The purpose of this study is to examine the relationship between corporate transparency and financial constraints in the Tehran Stock Exchange. To this end, 118 companies, listed on the Tehran Stock Exchange, were selected as our sample in the period of 1383-1394 (2004-2015). Applying panel data in multivariate logistic regression models, we tested the hypotheses of the research. In the present study, accounting earning transparency and discretionary accruals criteria represent corporate transparency; furthermore, KZ criterion measures the financial constraints. The Findings of this research reveal that there exists a negative and significant relationship between corporate transparency and financial constraints. This means that companies with more transparent financial information would face fewer restrictions while financing.

Keywords

• corporate transparency
• financial constraints
• pooled data
• kz criterion