Investigating the Effect of Risk Management on the Risk of Stock Price Falls with Emphasis on the Role of General Management of the Company

Subject Areas : Public Policy In Administration

seyed hesam vagfi ¹ (Assistant Professor,Department of Management,Economics and Accounting,Payame Noor University,Tehran,Iran)
kobra Zargar ² (M.Sc., Payame Noor University, Mashhad, Iran)

Received: 2021-06-08 Accepted : 2021-07-08 Published : 2021-08-23

Keywords: Effectiveness of risk management, risk of falling stock price, general management of the company,

Abstract :

Background: The risk of falling stocks has always been one of the concerns of investors and shareholders, and therefore, the present study aimed to investigate the effect of risk management effectiveness on the risk of falling stock prices with an emphasis on the role of the company's general management. This study was applied in terms of purpose and was causal (post-event) correlation methodology.  Objective: The aim of this study was to investigate the effectiveness of risk management with the moderating role of general management on the risk of stock price collapse in padded companies in Tehran Stock Exchange. Methods: The statistical population of the study was all the companies listed in Tehran Stock Exchange that applied the limitations and sampling method systematically and considering that one of the criteria of management effectiveness is audit fees and some companies have not disclosed the amount of fees, so 86 companies were considered as research samples and in the 9-year period of 2011 to 2019 were investigated. The method used for data collection was library and data were collected from the codal site and financial statements of companies to measure the variables and initial calculations were performed in Excel, then the research hypotheses were tested using multiple regression method using Ivyus software.  Findings: According to the results of the final estimate of the first hypothesis, it was stated that by increasing the effectiveness of risk management, the risk of falling stock price of the company is reduced and the probability of sudden collapse of the stock price is controlled, and according to the results of the second hypothesis of the research, it was stated that general management has a significant effect on the effectiveness of risk management and the reduction of stock price falls.  Conclusion: Considering the role of risk management and management General on the risk of falling stock prices can be stated that investors are suggested to consider the corporate risk management committee and their public ownership in order to reduce the potential losses in choosing their investment portfolio.

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