Evaluating the effect of agency conflict on the relationship between the quality of corporate governance and the company's financial performance

Subject Areas :

fatemeh samadi ¹ , neda kazempor hamraahi ² , massomeh jafari ³

1 - department of mangement .shargh azad
2 - department of mangement .shargh azad
3 - management . azad university.shargh

Received: 2023-12-15 Accepted : 2024-01-21 Published : 2024-06-30

Keywords: Financial Performance, Quality of corporate governance, conflict of agency,

Abstract :

Because the separation between ownership and control creates an agency conflict between owners and managers of the firm, strong corporate governance systems are expected to align the interests of the parties involved, whereby firms are more likely to improve their financial performance. The statistical sample includes 148 companies admitted to the Tehran Stock Exchange during the years 1392 to 1400, this study, it has been explained with two hypotheses that have been tested using the econometric technique of generalized moments (GMM) in Evivse software. The findings of the study showed that the quality of corporate governance has a positive and significant effect on both measures of financial performance, and conflict of representation has a negative and significant effect on both measures of financial performance of companies. It was also found that in companies with a high level of conflict of representation, the quality of corporate governance has a stronger effect on both measures of financial performance of companies. The findings of the study showed that the quality of corporate governance has a positive and significant effect on both measures of financial performance, and conflict of representation has a negative and significant effect on both measures of financial performance of companies. This is evidenced by the fact that firms with high levels of agency conflict and high-quality corporate governance mechanisms outperform other firms. Because the results show that the level of agency conflicts strengthens the relationship between the level of corporate governance mechanisms and financial performance.

References:

منابع و مآخذ
اميري و یادگاری,( 2022). بررسی تاثیر حاکمیت شرکتی بر عملکرد مالی با نقش واسطه ای کارایی فنی در شرکت های پذیرفته شده در بورس اوراق بهادار تهران. پژوهشهای جدید در مدیریت و حسابداری, 84(58), pp.44-68.
پژوهی, ناظمی, امین, نمازی و نویدرضا,( 2022). تأثیر ریسک بر قیمت سهام بانک‌ها و شرکت‌های بیمه با توجه به نقش سازوکارهای راهبری شرکتی. قضاوت و تصمیم گیری در حسابداری و حسابرسی, 1(2), pp.27-57.
رحمانیان کوشککی, عبدالرسول, کر رابعه, (2023). رابطه بین عملکرد پایداری شرکت و سیاست تقسیم سود با توجه به نقش حاکمیت شرکتی و مالکیت نهادی. پژوهشهای کاربردی در گزارشگری مالی, 12(1), pp.41-68
رحمانیان کوشککی, عبدالرسول و مطاعی, (2023). نقش تأمین مالی مبتنی بر بدهی در رابطه بین حاکمیت شرکتی و سرمایه‌گذاری تحقیق و توسعه. قضاوت و تصمیم گیری در حسابداری, 2(8), pp.91-109
رسفیجانی و دهقان, (2021). تاثیر حاکمیت شرکتی بر عملکرد مالی با توجه به نقش میانجی پایداری شرکت (مورد مطالعه: بانک های خصوصی کشور). مهندسی مالی و مدیریت اوراق بهادار, 12(47), pp.188-209.
صالحی، اله کرم. (1400). تاثیر قدرت راهبری شرکتی بر نقدشوندگی بازار سهام: با تاکید بر معیارهای آمیهود، حجم معامله و شکاف قیمتی. دانش سرمایه‌گذاری، 10(37): 37-55.
کاکایی، حمید؛ ملک زاده، الهام؛ اخوی، محمدسادات؛ دامن کشیده، مرجان؛ حقیقت، طوبی. (1401). بررسی نقش راهبری شرکتی بر عملکرد مالی شرکت‌های دانش بنیان. دومین کنفرانس بین‌المللی آزمایشگاه مدیریت و رویکردهای نوآورانه در مدیریت و اقتصاد.
عزیز گرد, محمدرضا چکاو محمد، جهانشائیان, (2022). بررسی رابطه حاکمیت شرکتی و عملکرد مالی؛ با تأکید بر روابط غیرخطی و نقش ساختار هیئت مدیره و ساختار مالکیت. نشریه علمی رویکردهای پژوهشی نوین مدیریت و حسابداری, 2(7), pp.250-261.‎
نخجوانی, صدف .دلنواز اصغری,( 2023). تاثیر حاکمیت شرکتی بر عملکرد شرکت در شرایط مخاطرات اخلاقیAccounting and Corporate Governance Research , 2(3), pp.91-110.‎
Adams, M. and Jiang, W., 2016. Do outside directors influence the financial performance of risk-trading firms? Evidence from the United Kingdom (UK) insurance industry. Journal of Banking & Finance, 64, pp.36-51.
Al-Gamrh, B., Al-Dhamari, R., Jalan, A. and Afshar Jahanshahi, A., 2020. The impact of board independence and foreign ownership on financial and social performance of firms: evidence from the UAE. Journal of Applied Accounting Research, 21(2), pp.201-229.
Assenso-Okofo, O., Jahangir Ali, M. and Ahmed, K., 2021. The impact of corporate governance on the relationship between earnings management and CEO compensation. Journal of Applied Accounting Research, 22(3), pp.436-464.
Akbar, Saeed, Jannine Poletti-Hughes, Ramadan El-Faitouri, and Syed Zulfiqar Ali Shah. "More on the relationship between corporate governance and firm performance in the UK: Evidence from the application of generalized method of moments estimation." Research in International Business and Finance 38 (2016): 417-429.
Bebchuk, L., Cohen, A. and Ferrell, A., 2009. What matters in corporate governance?. The Review of financial studies, 22(2), pp.783-827.
Baraibar-Diez, E., Odriozola, M.D. and Sanchez, J.L.F., 2018. A perspective from corporate governance: how CSR is approached by European Corporate Governance codes. In The Critical State of Corporate Social Responsibility in Europe (Vol. 12, pp. 39-55). Emerald Publishing Limited.Bhagat, S. and Bolton, B., 2008. Corporate governance and firm performance. Journal of corporate finance, 14(3), pp.257-273.
Francis, B., Hasan, I. and Wu, Q., 2015. Professors in the boardroom and their impact on corporate governance and firm performance. Financial management, 44(3), pp.547-581.
Faisal, F., Majid, M.S.A. and Sakir, A., 2020. Agency conflicts, firm value, and monitoring mechanisms: An empirical evidence from Indonesia. Cogent Economics & Finance, 8(1), p.1822018.
Guluma, T.F., 2021. The impact of corporate governance measures on firm performance: the influences of managerial overconfidence. Future Business Journal, 7(1), pp.1-18.
Kusumadewi, N.L.G.L. and Wardhani, R., 2020. The effect of three types of agency problems on the firm performance: Evidence from Indonesia. International Journal of Monetary Economics and Finance, 13(3), pp.279-286.
Kasbar, Mohammed Sulaiman Hassan, Nicholas Tsitsianis, Androniki Triantafylli, and Colin Haslam. "An empirical evaluation of the impact of agency conflicts on the association between corporate governance and firm financial performance." Journal of Applied Accounting Research 24, no. 2 (2023): 235-259.
Kyere, M. and Ausloos, M., 2021. Corporate governance and firms financial performance in the United Kingdom. International Journal of Finance & Economics, 26(2), pp.1871-1885.
Munir, A., Khan, F.U., Usman, M. and Khuram, S., 2019. Relationship between corporate governance, corporate sustainability and financial performance. Pakistan Journal of Commerce & Social Sciences, 13(4).
Radu, C., Smaili, N. and Constantinescu, A., 2022. The impact of the board of directors on corporate social performance: a multivariate approach. Journal of Applied Accounting Research, 23(5), pp.1135-1156.
Watts, R.L. and Zimmerman, J.L., 1990. Positive accounting theory: a ten year perspective. Accounting review, pp.131-156.
Wintoki, M.B., Linck, J.S. and Netter, J.M., 2012. Endogeneity and the dynamics of internal corporate governance. Journal of financial economics, 105(3), pp.581-606.
Wijaya, L.I., Welson, W. and Murhadi, W.R., 2020. Ownership structure, good corporate governance, and firm performance in the Indonesian capital market.
Zaman, R., Jain, T., Samara, G. and Jamali, D., 2022. Corporate governance meets corporate social responsibility: Mapping the interface. Business & Society, 61(3), pp.690-752.