International Journal of Finance & Managerial Accounting

International Journal of Finance & Managerial Accounting

Information Efficiency and Default Risk of TSE Llisted Companies; Mediation of Institutional Blockholders

Document Type : Original Article

Authors
Mohammad Hamzehee 1
Mohammad Ali Habibi Vosta Kalaei 2
1 Msc. of Finance, Department of Financ, Khatam University, Tehran, Iran.
2 Ph.D. candidate of Accounting, Accounting Department, Science, Research & Technology Branch, Islamic Azad University, Tehran, Iran.
10.22034/ijfma.2025.78219.2222
Abstract
The main objective of this study is to explain the links between information efficiency and default risk of companies listed on Tehran Stock Exchange, with an emphasis on the mediating role of institutional blockholders. the association between information efficiency and default risk was first examined, and then the mediating role of institutional blockholders was tested using parametric methods. We applied Baron and Kenny's (1986) model for mediation. The present study is applied in terms of purpose and is classified as descriptive-correlative research. The statistical population is comprised of TSE listed companies from 2016 to 2023, and the final sample was selected as 181 companies after the systematic (targeted) elimination of population. In order to examine the relationship between percieved research variables, multivariate regression analysis model by means of the Generalized Least Squares (GLS) weights was used in Eviews software. The research findings show that there is a negative and economically as well as statistically significant relationship between information efficiency and default risk of sample companies. Furthermore, the Baron and Kenny's (1986) analysis revealed that information asymmetry makes it difficult for institutional blockholders to enter the deals and/or encourages threats to exit, both of which increase the risk of default. The results can afford observable signals based on market authenticities in order to enlarge and improve default risk assessment and prediction models, and lead to more flexible contracts with suppliers, customers, and other partners and stakeholders of the organization. It can also lead enterprise managers to better mitigate business risks.
Keywords
Information Efficiency
Information Asymmetry
Default Risk
Institutional Blockholders
Tehran Stock Exchange
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