The Relationship between Information Risk, Cost of Equity Capital and Inventory Policies in Firms with Extensive Political Connections

This study Investigate the relationship between information risks, cost of equity capital and inventory policies in firms with extensive political connections that were listed in Tehran Stock Exchange Market between 2001 and 2011. The companies which have extensive political connections with the government through the TOPSIS multi-criteria decision method and entropy weight method were identified. Indicators of political costsinclude the market value of equity, total assets, income tax, number of employees; total export sale and paid insurance premium and the highest rank of the companies among the above-mentioned factors indicated the more extensive political connections of the companies. After ranking of 95 sampled companies, 43 top companies were classified in the group of companies that have extensive political connections with the government.The test result of the research hypotheses using multi-variable regression model and layout of combined data showed that there is significant and negative relation between accruals quality and inventory policies in firms with extensive political connections with government. Also there is a significant and negative relation between innate accruals quality and inventory policies in firms with extensive political connectionswith government. In addition, there is significant and negative relation between the cost of equity capital and inventory policies in firms with extensive political connections with government. But there is no significant relation between discretionary component of accruals quality and inventory policies in firms with extensive political connections with government.

کلیدواژه ها:

Information Risk ، Cost of Equity Capital ، Inventory Policies ، Political Connections ، Multi-Criteria Decision Making