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Paper Information

Journal:   JOURNAL OF FINANCIAL MANAGEMENT STRATEGY   spring 2019 , Volume 7 , Number 1 (24) #g00630; Page(s) 1 To 39.

The Study of Enterprise Risk Management (ERM) Effect on the Relationship between Managerial Ability and Investment Efficiency Increase

* department of accounting, faculty of human sciences, Khorasgan Azad University, Isfahan, Iran
This study investigates how ERM (Enterprise Risk Management) affects the relation of managerial ability and investment efficiency. According to theory, investment efficiency increases when that investment inefficiency decreases and ERM Techniques along with managerial ability increases investment efficiency and decreases investment inefficiency. Thus, the hypothesis predicts that ERM Techniques play effective roles on the relation between management ability and capital investment efficiency and decrease over-or under-investment. The variables include managerial ability as independent variable that is measured by the methodology developed in Demerjian et al. (2012) to estimate managerial ability, and over-or under-investment as dependent variables that is measured by Gan (2015) and Biddle et al. (2009). Also ERM Techniques are measured by Gordon et al. (2009). The sample includes 106 Tehran Stock Exchange (TSE) firms at the period from 2004 to 2017. The findings conclude that ERM Techniques alone have no effect on relation between managerial ability and capital investment efficiency.
Keyword(s): managerial ability,Investment efficiency,over investment,under investment,ERM (Enterprise Risk Management)
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