The effect of corporate governance on earning response coefficient; the moderating role of firm size

Document Type : Original Article

Authors
seyed mohsen mousavi 1
meisam arabzadeh 2
mohammad alipour 3
omid faraji 4
Ali Akbar Farzinfar 5
1 Ph.D. Student in Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran.
2 Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran
3 department of accounting, islamic azad university,khalkhal, iran
4 Faculty of management and accounting, University of Tehran, College of Farabi, Qom, Iran.
5 Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran.
10.22034/jmaak.2025.23928
Abstract
The purpose of this research is to investigate the effect of corporate governance on the earning response coefficient with regard to the moderating effect of company size. In order to conduct the research, combined data and a sample consisting of 1272 observations between 2016 and 2023 from Tehran Stock Exchange companies were used, and OLS regression and systematic GMM were used to test the hypotheses. The findings of the research showed that applying effective corporate governance leads to an increase in earning response coefficient and company size weakens the effect of corporate governance on in earning response coefficient. The results of the research using the systematic GMM method also showed that corporate governance has a positive and significant effect on the earning response coefficient and company size has a negative effect on the relationship between corporate governance and earning response coefficient. Based on the results of the research obtained using different methods, it can be said that corporate governance in Iran is not symbolic and affects the behavior of shareholders. Establishing an effective corporate governance increases investors' confidence in the information announced by the companies, and the shareholders react better to the information announced by the companies. Also, company size has an important interactive role in the relationship between corporate governance and earning response coefficient.
Keywords
Keywords: Earning response coefficient
Corporate governance
Firm size
Moderating variable
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