The comparative investigation of corporate governance mechanisms in financial distressed and non financial distressed listed companies of Tehran Stock Exchange

Abstract

The goal of this Thesis is to study the corporate governance mechanisms impacts on financial distressed and non financial distressed listed companies of Tehran Stock Exchange. This research population includes 118 companies of Tehran Stock exchange during 1381 to 1390. In this research, corporate governance mechanisms as independent variables are institutional ownership percent, ownership concentration percent, independent directors of board percent, percentage of free float stocks and company’s auditor independency situation. Control variables are size, operating profitability ratio, operating cash flows, debt and profitability ratios. Dependant variable of this research is to clarify the company’s financial distress or non financial distress which has been specified according to 141th act of business law. Research hypotheses are tested by independent t-test of sixth version of Eviews econometrics software. Results show that during research period in distressed companies, independent directors of board percent is lower and these companies have been encountered with distress. Furthermore, auditors independency situation have not been successful in any years of research nor during the whole period of research.

Keywords

• corporate governance
• financial distressed and non financial distressed companies
• independent t-test
• tehran stock exchange