Examining the Effect of Corporate Governance Mechanisms on Efficient working Capital Management

Subject Areas : Management Accounting

محسن دستگیر ¹ (ندارد)
مهسا هنرمند ² (نویسنده مسؤول)

Received: 2014-06-22 Accepted : 2014-08-06 Published : 2014-10-12

Keywords: Agency theory, Corporate Governance, working capital management, Tehran&#x0D, &#x0D, Stock Exchange,

Abstract :

One of the important issues of accounting and financial management literature is companyownership, because this belief that the mechanisms of corporate governance are hiring theabilities, which have straight effect on the abilities of investors to make the management usethe existed resources in organization effectively. Working capital management is one theother part which plays a critical role in management structure of a company. Ineffectivepolicies of working capital management can be followed by a weak corporate governance andresult in reducing the wealth of stockholders. This research includes influential analysis andactions of corporate governance on effectiveness of working capital management betweenlisted firms of Tehran Stock Exchange. To do so, variables of percent of institutionalownership, concentration of institutional ownership, size of board, independence of board,and segregation the tasks of chairman and vice chairman as mechanisms of corporategovernance and variables of duration of accounts receivable, duration of keeping inventory,duration of accounts payable, and cash flows of company as the measures of effectiveness ofworking capital management are taken to account. The required data were gathered annuallyduring 2006-2011.According to econometric propositions, the regression method based onpanel data based on constant effects for all hypotheses of research is chosen and analysis ofdata followed .the findings of this study indicate that corporate governance plays some role inimproving the efficiency of working capital management.