Presenting the Relationship Model between Economic Policy Uncertainty, Unexpected Earnings, and Voluntary Disclosure of Information (Case Study: Companies Listed on the Tehran Stock Exchange)
Keywords:
Unexpected Earnings, Information Asymmetry, Voluntary Disclosure, Economic Policy UncertaintyAbstract
This study aimed to design and test a model explaining the relationship between economic policy uncertainty, unexpected earnings, and the level of voluntary disclosure among companies listed on the Tehran Stock Exchange. The research was descriptive and ex post facto, relying on historical financial data. The statistical population comprised all listed companies from 2011 to 2019, and 127 firms were selected through systematic elimination. Data were extracted from financial statements and board reports and analyzed using panel regression with F-Limer (Chow) and Hausman tests. Unexpected earnings were measured as the deviation between actual and forecasted earnings per share, while voluntary disclosure was assessed using a six-component disclosure index. Economic policy uncertainty was calculated based on the inflation rate. Results revealed a negative and significant effect of economic policy uncertainty on unexpected earnings, indicating that higher policy uncertainty decreases the likelihood of generating positive unexpected profits. Conversely, the impact of economic policy uncertainty on voluntary disclosure was not significant, showing no direct relationship between policy uncertainty and managers’ disclosure behavior. The determination coefficients were 49% for the unexpected earnings model and 89% for the voluntary disclosure model, confirming acceptable explanatory power. The findings highlight the importance of stable economic policies in improving earnings predictability and reducing investor risk while suggesting that policy uncertainty alone does not significantly drive voluntary disclosure decisions. Policymakers should aim to minimize economic volatility and enhance transparency to strengthen investor confidence and market efficiency.
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Copyright (c) 2025 Mehdi Avazzadeh Taziyani (Author); Mohammad Hosein Ranjbar (Corresponding author); Hosein Badihi, Bijan Abedini (Author)
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
