The Study of the Impact of the Corporate Governance mechanisms on the Risk Taking Behavior in Listed Companies of the Tehran Stock Exchange

اقتصاد پولی مالی

Article 4, Volume 24, Issue 14, October 2017, Pages 124-149   

Document Type: پژوهشی

DOI: 10.22067/pm.v24i13.56811

Authors

hajar parvan^* ; Esmaeel Ramzanpoor; Mohammad hasan gholizadeh

University of Guilan

Abstract

This study aims investigating Impact of corporate governance mechanisms on risk-taking behavior of Listed Companies in Tehran Stock Exchange. Researches show that costs of risk management failure is ignored in private and state enterprises, while risk taking is an essential motive in business and entrepreneurship. Corporate governance must ensure that risks could be identified, managed and timely handled.
corporate governance mechanisms include ownership percentage of institutional shareholders, ownership concentration and duration of CEO’s tenure as well as risk dependent variables (financial risk (long-term leverage) and cash flow risk). Financial information of 86 Listed Companies in Tehran Stock Exchange in 1386-1393 has been used. To test hypotheses, multi-variable regression (EGLS) and mixed data method using Eviews 8 Software has been applied.
In summary, results showed a positive and significant influence between ownership concentration, duration of CEO’s tenure, and risk dependent variables (financial risk and cash flow risk). Also, they showed a negative and significant relationship between ownership percentage of institutional shareholders and risk dependent variables.

Keywords

corporate governance; risk taking; Institutional Shareholders; ownership concentration