The effect of management ability on Earnings Response Coefficient according to the role of information asymmetry

If high-ability managers effectively improve the information environment by disclosing quality information, investors should be more responsive to current earnings provided by high-ability managers; Therefore, when firms have an improved information environment, investors use current earnings information provided by high-ability managers, leading to a relationship between managerial ability and earnings responsiveness. In this research, the effect of management ability on Earnings Response Coefficient was investigated with regard to the role of information asymmetry. According to the analysis of past information, this research is considered as a type of quasi-experimental research. Also, in terms of practical purpose and in terms of method, it is correlation-regression analysis. Research hypotheses were tested based on a statistical sample of 164 companies during a 10-year period from 1391 to 1400 using multivariate regression models with combined data. The results show the positive effect of management ability on Earnings Response Coefficient; But the results showed that the increase in the difference in the bid price as a measure of information asymmetry leads to the adjustment of this relationship; In a way that weakens the effect of management ability on the Earnings Response Coefficient.