A Review of the Relationship between the Structure of Corporate Governance and Financial Distress (Financial Crisis) In Companies Listed In Tehran Stock Exchange.
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Many different theories exist considering the relationship between the structure of corporate governance and financial distress (crisis); several empirical articles have, also, been written investigating the factors affecting the relationship between the structure of corporate governance and financial distress. The current research intends to investigate the effect of the relationship between the structure of corporate governance and financial distress (crisis) in companies listed in Tehran Stock Exchange. This study is a descriptive-inferential research; descriptive statistics was used to describe the research sample population under study while inferential statistics was used to analyze the data associated with the research hypotheses. Out of 120 companies, 91 companies were selected as the research sample population based on Cochran’s Sample Size Formula. Data collection was done through document analysis of the financial statements provided by the companies listed in Tehran Stock Exchange. The results of the present research indicates that there was a statistically significant positive relationship between the ‘independence of the directing board’, ‘CEO Duality’, and ‘financial distress (crisis)’ in the Investment Market of Iran; whereas, there was a statistically significant negative relationship between ‘institutional investment’, ‘director ownership’, ‘the number of the Audit Committee members’, and ‘financial distress (crisis)’. Furthermore, the significance level of the effects of the control variables namely the ‘size’ and the ‘financial leverage’ of the company are indicative of a statistically significant relationship between these two variables and ‘financial distress’ in companies. However, there was not any statistically significant relationship between the ‘age’ of the company and ‘financial distress’
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