The Relationship between the quality of internal and external corporate governance and the Risk Sentiment of annual reports using static and dynamic models

Investor sentiment relates to investors' subjective beliefs about cash flows and investment risks. This type of sentiment has a consistent effect on stock prices. Ownership and governance factors may play a critical role in corporate risk reporting because managers for shareholders prepare annual reports. The main purpose of the current research is the relationship between the quality of internal and external corporate governance and the risk Sentiment of annual reports. For this purpose, 130 companies admitted to the Tehran Stock Exchange between 2008 and 2022 were selected by the systematic elimination method, and in order to increase the degree of confidence in the results of the hypothesis test, the regression method of static and dynamic panel data was used. To measure the sense of risk, the vocabulary frequency method has been used. According to the research findings, in both static and dynamic states, weak corporate governance has a positive relationship with risk Sentiment and strong corporate governance has a negative relationship with risk Sentiment. In addition, the Hirschman index variable has no relationship with risk perception. The existence of internal and external corporate governance reduces inefficient investments and makes managers make optimal and efficient investment decisions.