مطالعات تجربی حسابداری مالی (Dec 2016)
The Relationship between Corporate Governance and its Dimensions and investment Efficiency on the Firms Accepted in Tehran stock Exchange
Abstract
Previous researches revealed that corporate governance mechanisms assists the investors in motivating and compelling pillars of company management to more efficient use of corporate resources with doing stewardship duty. Managers can play a critical role in using the resources through making appropriate decisions about optimal investment. Inefficient investment could be the result of poor corporate governance. In other words, corporate governance is a key and monitoring tool in investment efficiency. The purpose of this study is to analyze the relationship between corporate governance and investment efficiency in the firms listed in the Tehran Stock Exchange. For testing hypotheses multivariate linear regression model using estimated generalized least squares method (EGLS) was used. To reach the purpose of the study, a sample of 138 companies were selected by screening (systematic deleting) in the years 2008 to 2014. Based on 93 indicators of hassass yegane and Salimi (2011), we estimated the efficiency of corporate governance and its dimensions such as transparency, effectiveness of board, shareholder rights and the effects of ownership. We also measured the efficiency of investment according to the Richardson’s (2006) model. In general, the results show that corporate governance and its dimensions have a significant positive effect on the efficiency of investment. In addition, a significant and positive impact of variables control such as investment opportunities (Tobin's Q) and firm size on investment efficiency was confirmed. The cash flow had a negative and significant relationship on investment efficiency
