Voluntary Disclosure and Informational Content of Share Price: Evidence from Tehran Stock Exchange

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 firm-specific 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.