The Effect of CEO Power on Stock Price Delay

Document Type : Research Paper


1 Department of Accounting, Qom Branch, Islamic Azad University, Qom, Iran

2 Department of Accounting and Finance, Faculty of Management and Accounting, College of Farabi, University of Tehran, Qom, Iran



News and information reflect on the stock prices rapidly in the capital market. But some factors cause delays in reaching the stock market to its intrinsic value. This study aims to investigate the effect of CEO Power on stock price delay of listed Companies in Tehran Stock Exchange. In order to measure the power of the CEO, six different criteria, based on the research of Lisic et al. have been used. For this purpose, data related to 107 companies in Tehran Stock Exchange from 2011 to 2018 were analyzed. The regression model used in this research has been assessed using panel data with fixed effects approach. The results showed that CEO power has a negative and significant impact on stock price delay. The results also indicate that the powerful executives have more independence and play a more supervisory role over the board of directors; This reduces the infringement of the stakeholder rights and lowers the agency costs. Lower agency costs result in less information asymmetry and lower financial information transparency, and ultimately, reduces the stock price delay.


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Volume 7, Issue 2
April 2022
Pages 313-326
  • Receive Date: 23 September 2020
  • Revise Date: 23 May 2021
  • Accept Date: 05 June 2021
  • First Publish Date: 06 September 2021