Presenting a non-linear model and optimization of conservatism and cost of equity based on the moderating role of corporate governance quality

Conservatism can reduce equity costs to the optimal level, and then, of course, increasing the level of conservatism will increase equity costs. Considering the existing (linear) relationships between conservatism and the cost of equity, it is important to know whether there is a non-linear relationship between these two components, and considering the impact of corporate governance on this type of relationship (in comparative terms), this issue was also investigated. In this regard, using a non-linear model, the existence of a uniform or U-shaped relationship between conservatism and the cost of equity was investigated. This research has been carried out in the framework of inductive-inductive arguments. In this research, library and field methods were used to collect information. The theoretical foundations and the research carried out were used as a library basis. The statistical population of this research includes all the companies listed on the Tehran Stock Exchange during the financial periods of ۲۰۱۳-۲۰۲۲. According to Cochran's formula, the number of samples used in this research has been obtained for an error of ۰.۰۸۵ (about ۸.۵%). According to research findings, there is a non-linear relationship between accounting conservatism and cost of equity. Therefore, it is obvious that the U relationship is the opposite meaning that if conservatism increases in a company, the cost of equity will increase first, and after a certain level of conservatism, an increase in conservatism will lead to a decrease in the cost of equity. Also, the quality of corporate governance affects the non-linear relationship between accounting conservatism and the cost of equity. For this purpose, ۵ components of corporate governance, including independence of the board of directors, concentration of ownership, ownership of institutional shareholders, managerial ownership and ownership of real shareholders, were investigated, and the results showed that the quality of corporate governance has a significant effect on the non-linear relationship between accounting conservatism and the cost of equity.

کلیدواژه ها:

Non-linear model ، Conservatism ، equity cost ، corporate governance quality