Managers’ Empire Building and Bankruptcy Risk According to Industry Market Concentration

Document Type : Original Article

Authors

1 Assistant Professor of Islamic Azad University, Tehran South Branch

2 PhD student, Department of Accounting, Faculty of Economics and Accounting, South Tehran Branch, Islamic Azad University, Tehran,

Abstract

Some studies that have paid attention to the factors and events that lead to bankruptcy have considered the characteristics and opportunism of managers as well as competitiveness among companies to be effective in this field. The purpose of this research is to examine the relationship between Managers’ Empire Building and bankruptcy risk with regard to industry market concentration. Research in terms of purpose is part of applied research and research method in terms of nature and content is cause and effect. The research was conducted in the framework of deductive-inductive reasoning and panel analysis was used to analyze the hypotheses. The statistical population of the research was all the companies admitted to the Tehran Stock Exchange and using the systematic elimination sampling method, 116 companies were selected as the research sample in The 9-year period between 2013 and 2021 was investigated. The results of the research hypotheses test showed that there is a positive and significant relationship between Managers’ Empire Building and company bankruptcy, but none of the industry's market concentration indicators have an effect on this relationship.

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