Peer Effects in Corporate Disclosure Decisions Mohammad Hossein Safarzadeh*: Associate professor of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.

Information disclosure is considered one of the most important aspects of corporate performance and decision-making. Managers' decisions regarding the extent and manner of information disclosure will have a significant impact on the decision-making of other market players. The purpose of this r...

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Main Authors:	Mohammad Hossein Safarzadeh, Hamideh Asnaashari, Alireza Panahalipour
Format:	Article
Language:	fas
Published:	University of Isfahan 2024-11-01
Series:	Pizhūhish/hā-yi ḥisābdārī-i mālī
Subjects:	peer effects information disclosure external financing
Online Access:	https://far.ui.ac.ir/article_29152_1402b6c89abb3eee12771f57d063d21e.pdf
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author	Mohammad Hossein Safarzadeh Hamideh Asnaashari Alireza Panahalipour
author_facet	Mohammad Hossein Safarzadeh Hamideh Asnaashari Alireza Panahalipour
author_sort	Mohammad Hossein Safarzadeh
collection	DOAJ
description	Information disclosure is considered one of the most important aspects of corporate performance and decision-making. Managers' decisions regarding the extent and manner of information disclosure will have a significant impact on the decision-making of other market players. The purpose of this research is to investigate the effect of information disclosure by peer companies on managers' decision-making regarding the level of disclosure of companies listed on the Tehran Stock Exchange. The moderating role of reliance on external financing is also examined. The research method combines deductive and inductive approaches, and data from 113 companies over 10 years have been studied. The results showed that information disclosure by peer companies has a positive and significant effect on the disclosure of the companies under study. These results indicate that the information published by peers acts as a driver for increased corporate disclosure. Regarding the moderating role of reliance on external financing in the relationship between peer disclosure and corporate disclosure, the results showed that this factor does not have a significant effect on this relationship. Therefore, this feature does not have a significant impact on the effect of peers on corporate disclosure.IntroductionThe disclosure of information is considered one of the most important aspects of corporate performance and decision-making. This concept refers to how companies convey essential financial and non-financial information to stakeholders, including investors, regulatory bodies, and the public. Management decisions regarding the scope and manner of information disclosure significantly influence the decision-making processes of other market participants, affecting everything from investment strategies to perceptions of corporate value. In today's competitive environment, transparency and accountability have emerged as critical topics, as stakeholders increasingly demand a deeper understanding of corporate operations and governance.Despite extensive research on corporate disclosure policies, the role of peer companies in disclosure is often overlooked. Peer companies can serve as benchmarks for comparison and sources of competitive pressure, shaping how companies relate to their performance and prospects. This study aims to fill this gap by examining the impact of information disclosure by peer companies on management decisions regarding the level of information disclosure in companies listed on the Tehran Stock Exchange. Understanding how peer companies influence disclosure practices can provide valuable insights into corporate governance dynamics and market behavior. Furthermore, the moderating role of external financing dependence in the relationship between peer disclosure and corporate disclosure will also be explored. MethodologyThe present research is considered a fundamental study in terms of purpose. The research method was a combination of comparative and inductive methods. The statistical population consisted of 113 companies listed on the Tehran Stock Exchange, which were studied over 10 years from 2012 to 2021. The required data included financial and non-financial information extracted from the financial statements and board of directors' reports of the companies. The data collection method was library and documentary, and the data were collected in a combined (cross-sectional-time series) manner. To identify peer effects, Manski's (1993) model is employed. Linear multivariate regression models, along with the two-stage least squares method using average idiosyncratic equity returns of peer firms in the same industry (Pshock) as the instrumental variable, were used to analyze the data and test the research hypotheses. Statistical analyses were performed using EViews software. FindingsEffect of peer information disclosure on corporate disclosure: The results of the analysis showed that information disclosure by peer companies has a significant positive effect on the disclosure of the companies under study. These results indicate that the information published by peers acts as an incentive for greater disclosure by companies. The moderating role of dependence on external financing: Regarding the moderating role of dependence on external financing in the relationship between peer disclosure and corporate disclosure, the results showed that this factor does not have a significant effect on this relationship. In other words, greater or lesser dependence on external financing does not affect the role of peer companies in corporate disclosure. ConclusionThis study shows that information disclosure by peer companies can have a positive effect on the disclosure of other companies' information. With increased transparency of information by peers, companies move towards greater disclosure. This is because reduced external uncertainty and increased accuracy of management's private information encourage the company to disclose more. Additionally, dependence on external financing does not play a significant role in this relationship, and therefore this characteristic does not have a significant impact on the influence of peers on corporate disclosure. Possible reasons for this include the collateral-based nature of financing in Iran, which leads creditors and investors to focus more on the value of collateral rather than the disclosed financial information. Moreover, the specific economic conditions during the period from 2018 to 2020, characterized by an influx of liquidity into the capital market and a decrease in financing costs, enabled companies to attract capital easily, even without full disclosure of information. In this context, investors may pay less attention to the details of the disclosed information and be more influenced by the overall market sentiment. These factors may explain the lack of enhancement in the effect of peer information disclosure in conditions of greater dependence on external financing.
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spelling	doaj-art-2cc93a97c0d64a228014ccfcf084866f2025-08-20T01:47:33ZfasUniversity of IsfahanPizhūhish/hā-yi ḥisābdārī-i mālī2322-34052024-11-01161518610.22108/far.2024.141449.204729152Peer Effects in Corporate Disclosure Decisions Mohammad Hossein Safarzadeh*: Associate professor of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.Mohammad Hossein Safarzadeh0Hamideh Asnaashari1Alireza Panahalipour2Associate professor of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.Assistant professor of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.Master of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.Information disclosure is considered one of the most important aspects of corporate performance and decision-making. Managers' decisions regarding the extent and manner of information disclosure will have a significant impact on the decision-making of other market players. The purpose of this research is to investigate the effect of information disclosure by peer companies on managers' decision-making regarding the level of disclosure of companies listed on the Tehran Stock Exchange. The moderating role of reliance on external financing is also examined. The research method combines deductive and inductive approaches, and data from 113 companies over 10 years have been studied. The results showed that information disclosure by peer companies has a positive and significant effect on the disclosure of the companies under study. These results indicate that the information published by peers acts as a driver for increased corporate disclosure. Regarding the moderating role of reliance on external financing in the relationship between peer disclosure and corporate disclosure, the results showed that this factor does not have a significant effect on this relationship. Therefore, this feature does not have a significant impact on the effect of peers on corporate disclosure.IntroductionThe disclosure of information is considered one of the most important aspects of corporate performance and decision-making. This concept refers to how companies convey essential financial and non-financial information to stakeholders, including investors, regulatory bodies, and the public. Management decisions regarding the scope and manner of information disclosure significantly influence the decision-making processes of other market participants, affecting everything from investment strategies to perceptions of corporate value. In today's competitive environment, transparency and accountability have emerged as critical topics, as stakeholders increasingly demand a deeper understanding of corporate operations and governance.Despite extensive research on corporate disclosure policies, the role of peer companies in disclosure is often overlooked. Peer companies can serve as benchmarks for comparison and sources of competitive pressure, shaping how companies relate to their performance and prospects. This study aims to fill this gap by examining the impact of information disclosure by peer companies on management decisions regarding the level of information disclosure in companies listed on the Tehran Stock Exchange. Understanding how peer companies influence disclosure practices can provide valuable insights into corporate governance dynamics and market behavior. Furthermore, the moderating role of external financing dependence in the relationship between peer disclosure and corporate disclosure will also be explored. MethodologyThe present research is considered a fundamental study in terms of purpose. The research method was a combination of comparative and inductive methods. The statistical population consisted of 113 companies listed on the Tehran Stock Exchange, which were studied over 10 years from 2012 to 2021. The required data included financial and non-financial information extracted from the financial statements and board of directors' reports of the companies. The data collection method was library and documentary, and the data were collected in a combined (cross-sectional-time series) manner. To identify peer effects, Manski's (1993) model is employed. Linear multivariate regression models, along with the two-stage least squares method using average idiosyncratic equity returns of peer firms in the same industry (Pshock) as the instrumental variable, were used to analyze the data and test the research hypotheses. Statistical analyses were performed using EViews software. FindingsEffect of peer information disclosure on corporate disclosure: The results of the analysis showed that information disclosure by peer companies has a significant positive effect on the disclosure of the companies under study. These results indicate that the information published by peers acts as an incentive for greater disclosure by companies. The moderating role of dependence on external financing: Regarding the moderating role of dependence on external financing in the relationship between peer disclosure and corporate disclosure, the results showed that this factor does not have a significant effect on this relationship. In other words, greater or lesser dependence on external financing does not affect the role of peer companies in corporate disclosure. ConclusionThis study shows that information disclosure by peer companies can have a positive effect on the disclosure of other companies' information. With increased transparency of information by peers, companies move towards greater disclosure. This is because reduced external uncertainty and increased accuracy of management's private information encourage the company to disclose more. Additionally, dependence on external financing does not play a significant role in this relationship, and therefore this characteristic does not have a significant impact on the influence of peers on corporate disclosure. Possible reasons for this include the collateral-based nature of financing in Iran, which leads creditors and investors to focus more on the value of collateral rather than the disclosed financial information. Moreover, the specific economic conditions during the period from 2018 to 2020, characterized by an influx of liquidity into the capital market and a decrease in financing costs, enabled companies to attract capital easily, even without full disclosure of information. In this context, investors may pay less attention to the details of the disclosed information and be more influenced by the overall market sentiment. These factors may explain the lack of enhancement in the effect of peer information disclosure in conditions of greater dependence on external financing.https://far.ui.ac.ir/article_29152_1402b6c89abb3eee12771f57d063d21e.pdfpeer effectsinformation disclosureexternal financing
spellingShingle	Mohammad Hossein Safarzadeh Hamideh Asnaashari Alireza Panahalipour Peer Effects in Corporate Disclosure Decisions Mohammad Hossein Safarzadeh*: Associate professor of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran. Pizhūhish/hā-yi ḥisābdārī-i mālī peer effects information disclosure external financing
title	Peer Effects in Corporate Disclosure Decisions Mohammad Hossein Safarzadeh*: Associate professor of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.
title_full	Peer Effects in Corporate Disclosure Decisions Mohammad Hossein Safarzadeh*: Associate professor of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.
title_fullStr	Peer Effects in Corporate Disclosure Decisions Mohammad Hossein Safarzadeh*: Associate professor of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.
title_full_unstemmed	Peer Effects in Corporate Disclosure Decisions Mohammad Hossein Safarzadeh*: Associate professor of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.
title_short	Peer Effects in Corporate Disclosure Decisions Mohammad Hossein Safarzadeh*: Associate professor of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.
title_sort	peer effects in corporate disclosure decisions mohammad hossein safarzadeh associate professor of accounting faculty of management and accounting shahid beheshti university tehran iran
topic	peer effects information disclosure external financing
url	https://far.ui.ac.ir/article_29152_1402b6c89abb3eee12771f57d063d21e.pdf
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Peer Effects in Corporate Disclosure Decisions Mohammad Hossein Safarzadeh*: Associate professor of Accounting, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.

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