The Effect of Information Asymmetry on the Relationship between Trade Credit Financing and Stock Price Crash Risk

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MORADI MOHAMMAD; KARAMI SAHAR

مرکز اطلاعات علمی Scientific Information Database (SID) - Trusted Source for Research and Academic Resources

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Paper Information

Journal: JOURNAL OF FINANCIAL ACCOUNTING KNOWLEDGE Year:2020 | Volume:6 | Issue:4 (23) Page(s): 77-98

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Title

The Effect of Information Asymmetry on the Relationship between Trade Credit Financing and Stock Price Crash Risk

Author(s)

MORADI MOHAMMAD | KARAMI SAHAR | Issue Writer Certificate

Keywords

Trade Credit FinancingQ1

Stock Price Crash RiskQ1

Information AsymmetryQ2

Abstract

Purpose: The purpose of the present study is to determine the impact of the Trade Credit Financing on the risk of Stock Price Crash Risk by emphasizing the role of Information Asymmetry. Methods: In order to achieve the research objectives, 141 companies is selected from the listed companies in Tehran Stock Exchange during 2008-2017. Multiple regression model and panel data is used to test the research hypotheses using two criteria of Stock Price Crash Risk. Results: The results indicate that Trade Credit Financing does not have a significant effect on the Stock Price Crash Risk. Also, Information Asymmetry cannot affect this relationship. Conclusion: The results of the research suggest that suppliers can not prevent future stock price risk through regulatory and information mechanisms, in other words, suppliers can not prevent bad news from accumulating. In fact, Trade credit does not provide much of an advantage to the supplier, and the supplier cannot evaluate and monitor its customers. Contribution: Most of the research about the Stock Price Crash Risk has focused on the uncertainty of information, corporate governance, and operating activities and has not paid much attention to the impact of financing. In this study, the relationship between financing through trade credit and the risk of stock price crash is discussed, Given the issues that may affect this relationship, an analysis and consideration of one of these factors, that is, the gap between the producer and the user and is known as Information Asymmetry, Paid.

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APA: Copy

MORADI, MOHAMMAD, & KARAMI, SAHAR. (2020). The Effect of Information Asymmetry on the Relationship between Trade Credit Financing and Stock Price Crash Risk. JOURNAL OF FINANCIAL ACCOUNTING KNOWLEDGE, 6(4 (23) ), 77-98. SID. https://sid.ir/paper/363455/en

Vancouver: Copy

MORADI MOHAMMAD, KARAMI SAHAR. The Effect of Information Asymmetry on the Relationship between Trade Credit Financing and Stock Price Crash Risk. JOURNAL OF FINANCIAL ACCOUNTING KNOWLEDGE[Internet]. 2020;6(4 (23) ):77-98. Available from: https://sid.ir/paper/363455/en

IEEE: Copy

MOHAMMAD MORADI, and SAHAR KARAMI, “The Effect of Information Asymmetry on the Relationship between Trade Credit Financing and Stock Price Crash Risk,” JOURNAL OF FINANCIAL ACCOUNTING KNOWLEDGE, vol. 6, no. 4 (23) , pp. 77–98, 2020, [Online]. Available: https://sid.ir/paper/363455/en

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