The Continuous Testing of Efficient Structure and Quiet-Life Hypotheses in Tehran Stock Exchange: Emphasizing the Role of Human Capital and Management Optimism

Document Type : Research Paper

Author

mazandaran university

Abstract

This study tests the efficient structure hypothesis and the role of human capital efficiency in predicted relations in this hypothesis as well as the quiet life hypothesis and the role of management optimism in predicted relations in this hypothesis. For this purpose, the data from 136 companies listed in Tehran Stock Exchange during 2010 to 2014, linear regression, and panel data models were used. The results showed that an increase in industry concentration, and in other words, a decrease in industry competition, will improve firm’s efficiency index (disapproving the quiet life hypothesis in Iran’s Capital Market) and increasing human capital efficiency, in addition to enhancing the direct relationship between industry concentration and firm’s efficiency, improves firm’s efficiency (confirming the role of human capital efficiency in the relationship between industry competition and firm’s efficiency). Moreover, the firm’s efficiency will increase firm’s growth (confirming efficient structure hypothesis in Iran’s Capital Market) and management optimism, in addition to increasing firm’s growth, would enhance the direct relationship between efficiency and firm’s growth (confirming the role of management optimism in efficient structure hypothesis).

Keywords

References

-      پوستین­چی، مجتبی. (1392). «بررسی تأثیر رقابت در صنعت بانکداری و ثبات بانک­ها». پایان‌نامه کارشناسی ارشد توسعه اقتصاد و برنامه­ریزی، دانشکده علوم اداری و اقتصادی دانشگاه فردوسی.
-      رضایی، فرزین و عازم، حامد. (1391). «تأثیر شدت رقابتی و راهبرد تجاری بر ارتباط بین اهرم مالی و عملکرد شرکت­ها». فصلنامه علمی پژوهشی حسابداری مدیریت، 5 (12)، صص. 101-115.
-      رهنمای رودپشتی، فریدون و غفاری، عباس. (1387). توسعه منابع انسانی: مطالعه موردی روش‌های نوین جذب مشتمل بر دستاوردهای کاربردی. تهران: انتشارات ترمه.
-      شهیکی تاش، محمدنبی. (1390). «رقابت، کارایی و سیاست رقابتی (مطالعه موردی صنایع ایران)». پایان­نامه دکتری رشته اقتصاد، دانشکده اقتصاد دانشگاه علامه طباطبایی.
-      صدرایی جواهری، احمد؛ ذبیحی­دان، محمدسعید و بهزادی، زهرا. (1391). «مقایسه فرضیه ساختار – رفتار – عملکرد با فرضیه ساختار کارا، در صنعت بیمه ایران». پژوهشنامه بیمه (صنعت بیمه سابق)، 27 (3)، صص. 29-49.
-      نمازی، محمد و ابراهیمی، شهلا. (1391). «بررسی ارتباط بین ساختار رقابتی بازار محصول و بازده سهام». فصلنامه پژوهش­های تجربی حسابداری مالی، 2 (1)، صص. 9-27.
-      نمازی، محمد و رضایی، غلامرضا. (1392). «بررسی اثرات رقابت در بازار محصول بر سیاست تقسیم سود نقدی شرکت‌ها». فصلنامه راهبرد مدیریت مالی، 1 (3)، صص. 1-24.
-      واعظ، سیدعلی؛ قلمبر، محمدحسین و قنواتی، نسرین. (1393). «بررسی اثر رقابت بالفعل و بالقوه بازار محصول بر سطح کیفیت افشای شرکت­های بورسی با بهره‌گیری از تکنیک تحلیل عاملی روی متغیرهای رقابت». فصلنامه راهبرد مدیریت مالی، 2 (4)، صص. 91-112.
-      Alchian, A.A. (1950). "Uncertainty, Evolution, and Economic Theory". Journal of Political Economy, 58 (3), pp.211-221.
-      Arrawatia, R., Misra, A. and Dawar, V. (2015). "Bank competition and efficiency: empirical evidence from Indian market". International Journal of Law and Management, 57 (3), pp.217 – 231.
-      Becker, G. S. (1983). Human Capital. A Theoretical and Empirical Analysis. with Special Reference to Education, 2nd edn., University of Chicago Press, Chicago.
-      BenMohamed, E., Fairchild, R. and Bouri, A. (2014). "Investment cash flow sensitivity under managerial optimism: New evidence from NYSE panel data firms". Journal of Economics, Finance and Administrative Science, 19, pp.11–18.
-      Berger, A.N. (1995). "The profit-structure in banking-tests of market power and efficient-structure hypotheses". Journal of Money, Credit, and Banking, 27, pp.404–431.
-      Berger, A.N. and Hannan, T.H. (1998). "The efficiency cost of market power in the banking industry: a test of the ‘‘quiet life’’ and related hypotheses". Review of Economics and Statistics, 80, pp.454–464.
-      Blaug, M. (1996). "A View of Human Capital". Journal of Economic Literature, 14 (3), pp.827-855.
-      Bontis, N. (1998). "Intellectual capital: An exploratory study that develops measures and models". Management Decision, 36 (2), pp.63–76.
-      Bouwman, C.H.S. (2014). "Managerial optimism and earnings smoothing". Journal of Banking & Finance, 41, pp. 283-303.
-      Demsetz, H. (1973). "Industry structure, market rivalry, and public policy". Journal of Law and Economics, 16, pp.1–9.
-      Edvinsson, L. and Malone, M. (1997). Intellectual Capital. Piatkus, London.
-      Evanoff, D.D. and Fortier, D.L., (1988). "Reevaluation of the structure-conduct performance paradigm in banking". Journal of Financial Services Research, 1, pp.277–294.
-      Fama, E. and Jensen, C. (1983). "Separation of ownership and control". Journal of Law Economics, 26 (2), pp.301–325.
-      Fama, E. F. (1980). "Agency problems and the theory of the firm". Journal of Political Economy, 88 (2), pp.288-307.
-      Gamerschalg, R., and Moeller, K. (2011). "The Positive Effects of Human Capital Reporting". Corporate Reputation Review, 14 (2), pp.145–155.
-      Gervais, S., Heaton, J. B. and Odean, T. (2002). The positive role of overconfidence and optimism in investment policy. Berkeley: Mimeo, University of California.
-      Goddard, J., Liu, H., Molyneux, P. and Wilson, J.O.S. (2013). "Do bank profits converge?" European Financial Management, 19 (2), pp.345-365.
-      Goel, A. M. and Thakor, A. V. (2000). Rationality overconfidence and leadership. Mimeo, University of California: Brekeley.
-      Grant, R. M. (1996). "Toward a knowledge-based theory of the firm". Strategic Management Journal, 17 (Special Issue: Knowledge and the Firm (Winter)), pp.109–122.
-      Grullon, G. and Michaely, R. (2007). "Corporate Payout Policy and Product Market Competition". Working Paper. Rice University.
-      Guenther, T. and Beyer, D. (2003). "Hurdles of the voluntary disclosure of information on intangibles – Empirical results for ‘new economy’ industries". Dresden Papers of Business Administration. No. 71/03.
-      Hackbarth, D. (2008). "Managerial traits and capital structure decisions". Journal of Financial and Quantitative Analysis, 43 (4), pp.843–882.
-      Hart, O. (1983). "The market mechanism as an incentive scheme". Bell Journal of Economics, 14, pp.366-382.
-      Heaton, J. B. (2002). "Managerial Optimism and Corporate Finance". Financial Management, 31 (2), pp.33–45.
-      Hendricks, L. (2002). "How important is Human Capital for Development". American Economic Review, 92 (1), pp.198-219.
-      Holmström, B. (1982). "Moral hazard in teams". Bell Journal of Economics, 13, pp.324–340.
-      Homma, T., Tsutsui, Y. and Uchida, H. (2014). "Firm growth and efficiency in the banking industry: A new test of the efficient structure hypothesis". Journal of Banking & Finance, 40, pp.143-153.
-      Hsieh, M.F. and Lee, C.C. (2010). "The puzzle between banking competition and profitability can be solved: international evidence from bank-level data". Journal of Financial Services Research, 38, pp.135–157.
-      Huang, H. and Lee, H. (2013). Product market competition and credit risk. Journal of Banking & Finance, 37, pp.324-340
-      Huang, S. and Peyer, U. (2012). "Corporate governance and product market competition". Available at: www.mit.edu.
-      Huselid, M. (1995). "The impact of human resource management practices on turnover, productivity, and corporate financial performance". Academy of Management Journal, 38 (3), pp.635–672.
-      Kahneman, D. and Lovallo, D. (1993). "Timid choice and bold forecasts: A cognitive perspective on risk taking". Management Science, 39, pp.17–31.
-      Kale, J. R. and Loon, Y. C. (2011). "Product market power and stock market liquidity". Journal of Financial Markets, 14, pp.376–410.
-      Karuna, C. (2007). "Industry product market competition and managerial incentives". Journal of Accounting and Economics, 43, pp.275–297.
-      Kato. K, Skinner, D.J and Kunimura, M. (2009). "Management Forecasts in Japan: An Empirical Study of Forecasts that Are Effectively Mandated". The Accounting Review, 84(5), pp.1575–1606.
-      Laksmana, I. and Yang, Y. (2014). "Product market competition and earnings management: Evidence from discretionary accruals and real activity manipulation". Advances in Accounting, incorporating Advances in International Accounting, 30 (2), pp.263-275.
-      Lev, B. (2001). Intangibles – Management, Measurement, and Reporting. Brookings Institution Press, Washington.
-      Malchup, F. (1967). "Theories of the firm: marginalize, behavioral, managerial". American Economic Review, 57 (1), pp.1–33.
-      Malmendier, U. and Tate, G. (2001). "CEO overconfidence and corporate investment". Mimeo. Harvard University.
-      Mayo, A. (2001). The Human Value of the Enterprise. Nicolas Brierley Publishing, London.
-      Nalebuff, B. and Stiglitz, J. (1983). "Prices and incentives: towards a general theory of compensation and competition". Bell Journal of Economics, 14, pp.21–43.
-      Narci, O., Ozcan Y.A., Şahin, İ., Tarcan, M. and Narcı, M. (2015). "An examination of competition and efficiency for hospital industry in Turkey". Health Care Management Science, 18 (4), pp.407-418.
-      Penrose, E. T. (1959). The Theory of the Growth of theFirm. Blackwell, Oxford.
-      Pfeffer, J. (1994). "Competitive Advantage through People: Unlashing the Power of the Work Force". Harvard Business School Press, Boston.
-      Schultz, T. W. (1961). "Investment in human capital". The American Economic Review, 51 (1), pp.1–17.
-      Shefrin, H. (2001). "Behavioral Corporate Finance". Journal of Applied Corporate Finance, 14 (3), Available at SSRN: http://dx.doi.org/10.2139/ssrn.288257.
-      Shepherd, W.G. (1986). "Tobin’s q and the structure–performance relationship: comment". American Economic Review, 76, pp.1205–1210.
-      Shleifer, A. and Vishny, R. (1997). "A survey of corporate governance". Journal of Finance, 52, pp.737-775.
-      Smirlock, M. (1985). "Evidence of the (None) relationship between concentration and profitability in banking". Journal of Money, Credit, and Banking, 17, pp.69–83.
-      Stewart, T.A. (1997). Intellectual Capital. Nicolas Brearly Publishing, London.
-      Stigler, G. (1958). "The economics of scale". Journal of Law and Economics, 1, pp.54-71.
-      Sveiby, K. (1997). The New Organizational Wealth: Managing and Measuring Knowledge Based Assets. Beret-Koehler, San Francisco, CA.
-      Sveiby, K. E. (2001). "A knowledge-based theory of the firm to guide strategy formulation". Journal of Intellectual Capital, 2 (4), pp.344–358.
-      Tirole, J. (1988). The Theory of Industrial Organization. MIT Press, Cambridge, MA.
-      Tregenna, F. (2009). "The fat years: the structure and profitability of the US banking sector in the pre-crisis period". Cambridge Journal of Economics, 33, pp.609–632.
-      Verma, S., and Dewe, P. (2004). Valuing human resources. ACCA Report.
-      Verma, S., and Dewe, P. (2008). "Valuing human resources: perceptions and practices in UK organizations". Journal of Human Resource Costing & Accounting, 12 (2), pp.102-123.
-      Weiss, L. (1974). "The concentration–profits relationship and antitrust. In: Goldschmid". H.J., Mann, H.M., Weston, J.F. (Eds.), Industrial Concentration: The New Learning. Little Brown & Co, Boston, MA.
-      Wright, P. M., McMahan, G. C., and McWilliams, A. (1994). "Human resources and sustained competitive advantage: A resource-based perspective". International Journal of Human Resource Management, 5 (2), pp.301– 326.
-      Wu, P., Gao, L. and Gu, T. (2015). "Business strategy, market competition and earnings management". Chinese Management Studies, 9 (3), 401-424.
      Zingales, L. (2000). "In search of new foundations". The Journal of Finance, 55 (4), pp.1623–1653.
Financial Management Strategy
Volume 4, Issue 3 - Serial Number 14
December 2016
Pages 95-120

Files

History

  • Receive Date: 06 April 2016
  • Revise Date: 13 October 2016
  • Accept Date: 20 December 2016

Share

How to cite

Statistics