The Effect of Corporate Governance Mechanisms on the Volume of Share Trading in Companies Listed in Tehran Stock Exchange

Abstract

Lack of monitoring the performance of managers not only has trampled the rights of shareholders and other stakeholders of the company, but also has increased the personal interests of managers in the absence of adequate monitoring on their performance.The aim of this studyis to investigate the effect of some of the corporate governance mechanisms on the volume of share trading in companies listed in Tehran Stock Exchange.93 companies listed in Tehran Stock Exchange are selected as sample using systematic removal method for the period 2007-2014. Data were also collected as combined panel data and were tested using multiple regression and econometrics models. The results showed that the independence of board of directors has a significant negative impact on the volume of share trading in companies. Moreover, the separation of the responsibilities of the manager and his membership in board of directors has no significant effect on the dependent variable of the study. Institutional investors ownership and auditor industry specialization have also a significant negative impact on the volume of share trading in companies. Eventually, the size of audit firm as one of the other audit quality standards has no significant effect on the volume of share trading in companies.