Relationship between Disclosure Quality and Agency Costs of Companies listed in Tehran Stock Exchange

Abstract

This research aims to investigate the relationship between disclosure quality of information and agency costs in the Tehran Stock Exchange. This has been followed by taking the conditions required for 98 companies in the years 2003-2012 and testing three secondary hypotheses. To test the hypotheses, a multivariate regression model within a panel data framework has been used. The agency costs are measured by the asset turnover ratio, the ratio of operating expenses to sales, and the interaction between growth opportunities and free cash flow, and the disclosure quality of information is measured by the scores assigned to the companies in the announcement of disclosure quality by the Tehran Securities and Exchange. The results showed that in the Tehran Sock Exchange, disclosure quality of information has no significant effect on agency costs

Keywords

• disclosure quality
• agency cost