پژوهشهای تجربی حسابداری (Sep 2021)
The Impact of Corporate Political Relationships on Value-Based Management Performance Indicators and Operational Efficiency
Abstract
The present paper is principally dealing with the impacts of political connections on the value-based management and performance efficiency indicators. For this purpose, the indicators of public companies and the percentage of institutional ownership of quasi-public companies were investigated to measure the political connections of companies, while factors “human resource productivity” and “investment” were included to assess operating efficiency. Data over the companies active in Tehran Stock Exchange were collected for 113 companies for 10 years from 2008 to 2017, and then analyzed adopting regression models “ordinary least squares (OLS)” and “generalized method of moment (GMM)” provided in Eviews 9.5. As with results, there is a positive relationship between public companies and value-based management (VBM) rating, while a negative significant relationship is observed between VBM rating and public institutional-owned companies. Besides this, there is a positive significant relationship between public companies and operating efficiency in terms of human resource productivity, while such a relationship is negative and significant in terms of investment efficiency. further, there is a negative significant relationship between quasi-public companies and both indicators of operating efficiency.Considering the relationship between quasi-public companies, operating efficiency, and value creation, we can state that the existence of a political relationship does not amend managers' supervisory behavior but yet enhances agency costs. The correct enforcement of Article 44 of the Constitution and supporting and triggering the real private sector to invest in these domains seems, therefore, as a mechanism that is capable of diminishing the impacts of quasi-public companies in the economic settings and creating a competitive environment.
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