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The purpose of this paper is to examine the effect of corporate governance on the relationship between the firm value for the listed companies in Tehran Stock Exchange during period 2013-2018. The corporate governance mechanisms include board size, board composition, institutional ownership, financial knowledge of the board, CEO duality, state-ownership and managerial ownership. The population is composed of the firms listed on the Tehran Stock Exchange. Filtering technique is used to select the sample. Furthermore, the multivariate regression method, Analysis of Variance (ANOVA) and tree regression methods are used to test the hypotheses. The findings reveal that firm's value prediction is influenced by the two variables of managerial ownership and the non-executive members of the board. The findings of this research show that investors conceive earnings management negatively and earnings management has a negative effect on firm value. But in corporations with high-quality corporate governance this effect is reduced. In other words, corporate governance mechanisms has a positive effect on the relationship between firm value and earnings management and firms with a higher corporate governance score face a less negative effect from earnings management. Key words: Corporate governance, firm's value, institutional ownership, state-ownership, managerial ownership.
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