Corporate Governance and Financial Management Decisions

Abstract

While the relationship between corporate governance mechanisms and financial management decisions has been widely researched, the empirical evidence has provided mixed results. This study applies panel data regression techniques to 880 firm-year observations of non-financial Iranian listed firms during 2006–2013 to examine the relationship between corporate governance mechanisms including percentage of institutional shareholders and blockholders, audit quality as well as financial management decisions.  In this research, short- and long-term investments were used as financial management decisionsproxies. The results show that percentage of institutional shareholders has a positive and significant relationship with financial management decisions proxies. It is recommended that Tehran stock exchange prepare information on corporate governance score and provide such information to investors to be taken into account in their decision-makings.