Investigating the effectiveness of management ability with an approach to investment returns for companies admitted to the stock exchange

Hamid Zakipour¹ Reza Jalaeifard²

1) Department of Education of Lorestan Province, Khorramabad, Iran
2) Master s degree, Afarinesh Borujard Institute of Higher Education, Borujard, Iran

IOI Code : XYCF-HKCEH
Publication : 2nd.International Congress on Management, Economy, Humanities and Business Development(icmba.ir)
Abstract :
    Capital management is one of the concepts raised in the corporate financial model that has many applications in corporate finance, one of these applications is the role of capital management in the profitability of companies. Therefore, the correct recognition and understanding of the factors influencing managers decision-making related to capital expenditures is of particular importance due to its effects on the long-term performance of the company. The purpose of this research is to investigate the impact of managerial abilities on investment efficiency and over-investment and under-investment of companies. This research is a library and analytical-causal study and is based on panel data analysis. In this research, the financial information of 112 companies admitted to the Tehran Stock Exchange during the period of 2016 to 2018 has been examined. The results showed that there is a positive and direct relationship between the measure of managerial abilities and the measure of investment efficiency of companies. The growth rate of the financial leverage ratio is considered as one of the main criteria affecting the investment efficiency of companies. If with the increase in the growth rate of the financial leverage ratio, the amount of financial restrictions of the companies will also increase, in the same proportion, the fluctuations of the stock prices of the companies will move towards the negative direction and finally, in the long term, the profitability and investment efficiency of the companies will decrease. Also, the results showed that, between management abilities and excessive investment of companies; There is a positive and direct relationship, and there is a negative and inverse relationship between management abilities and underinvestment of companies.

Keywords : company stock exchange management ability investment changes