Abstract:
The aim of this research was to determine the impact of voluntary information
disclosure on informational content of share price. In this regard, future earnings
response coefficient was used to determine the informational content of the share
price about the future income information. Furthermore, share price synchronicity
was used to evaluate the informational content of the share price about firm-specific
information. To this end, it was attempted to select 98 firms listed in Tehran Stock
Exchange (from 2005 to 2016). The analyses indicated that the voluntary
information disclosure improved the informational content of share prices in terms
of the future earnings. However, it was indicated that the voluntary information
disclosure did not affect the informational content of share price in terms of firmspecific
information. So, voluntary information disclosure increases the capability of
the investors to predict the future income and, consequently, future income
information will be reflected in the share price.
Machine summary:
"As such, one can measure the relative amount of firm-related information (compared to information on the industry/market level) reflected in the share price (Piotroski & Roulstone, 2004).
Also, high-quality information disclosure increases the capability of investors to forecast the future income and, consequently, information on future earnings is exhibited in the share price as well as improved future income response coefficient, and the informational content of share price will be improved thereof (Gelb & Zarowin, 2002; Lundholm & Myers, 2002; Haw et al.
However, in the present study, it was attempted to regard the share price synchronicity and the future earnings response coefficient as two criteria in evaluating the informational content of share price so that (about the impact of voluntary information disclosure) a more comprehensive conclusion would be achieved.
In a similar research in the realm of capital market of Iran, Imani Barandagh and Abdi (2016) paid due attention to the role of informational environment in future earnings response coefficient and concluded that income smoothing in diverse informational environments had a different impact on informational content of share price.
(2014) and Imani Barandagh and Abdi (2016), it has been attempted to make use of Regression Model 3 in order to test the first research hypothesis(View the image of this page)Ctrls represents the control variables in relation to informational content of share price about future earnings.
(View the image of this page)The second research hypothesis evaluated the effect of the level of voluntary information disclosure on the informational content of share price about firm-specific information in accordance with Model 4."