The relationship between firm reputation and managerial entrenchment.

Autor: Zakerean, Morteza, Nakhaei, Habibollah, Talebnia, Godratollah
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Zdroj: Journal of Public Affairs (14723891); May2022, Vol. 22 Issue 2, p1-9, 9p
Abstrakt: The present study is concerned about the relationship between firm reputation and managerial entrenchment in listed firms on the Tehran Stock Exchange. In other words, this paper attempts to figure out whether a firm reputation contributes to managerial entrenchment. The multivariate regression model is used for this study. Research hypotheses also examined using a sample of 768 listed observations on the Tehran Stock Exchange during 2012–2017 and by using the multivariate regression model based on panel data technique and fixed effects model. The obtained results show a positive and significant relationship between firm reputation and managerial entrenchment, such that an increase in firm reputation during the time has led to an increased managerial entrenchment. Moreover, the present paper figures out that firm reputation would also lead to narcissism and overconfidence of managers. This paper utilized the exploratory factor analysis for measuring managerial entrenchment and firm reputation, which is a modern method for calculating these two indices. Six indices of board compensation, CEO tenure, CEO duality, reverse distributed earnings, and excessive investment was used for managerial entrenchment. Further, for measuring CEO narcissism by using the exploratory factor analysis, two indices of CEO signature magnitude and cash compensation were converted to a single index of CEO narcissism for the first time which is used for calculating narcissism. This paper is the first study on this topic in the emerging markets, so it provides the users, analysts, and legal institutions with useful information about intrinsic and acquired features of management that contribute significantly to the comparability of financial statements. [ABSTRACT FROM AUTHOR]
Databáze: Complementary Index
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