Applied Research in Financial Reporting

Applied Research in Financial Reporting

Organizational Concentration and Efficiency of Internal Capital Markets of Business Groups in Resource Allocation and Performance; Emphasizing the Moderating Role of Environmental Uncertainty

Document Type : Original Article

Authors
Faramarz Karami taleghani,
, Mohamadreza Vatanparast
, Javad Rezazadeh
, keyhan Azadi
Abstract
Research literature shows that organizational decision-making is a fundamental issue in corporate governance. Due to the type of organizational structure of business groups and, consequently, the role of central management and subsidiaries in the decision-making process, it is possible that the distribution of organizational decision-making rights in these groups is affected by the cost of knowledge transfer (in conditions of centralized decision-making) and the cost agencies (in decentralized decision-making conditions) and have economic consequences such as the inefficiency of the internal capital markets of business groups. Therefore, the aim of this research is to investigate the non-linear relationship between organizational concentration and the efficiency of internal capital markets of business groups in resource allocation and performance considering environmental uncertainty. In order to achieve the goal of the research, the information of 18 business groups, whose main companies are listed in the Tehran Stock Exchange or OTC, were collected during the years 2015 to 2022 and analyzed using multiple regression analysis based on panel data. it placed. The findings of the research show that organizational concentration has a non-linear relationship with the efficiency of resource allocation and the efficiency of the internal capital markets of business groups. Also, the findings show that environmental uncertainty modifies the nonlinear relationship of organizational focus with the efficiency of resource allocation and the efficiency of the internal capital markets of groups.
 
 
Keywords
Organizational Concentration
Internal Capital Markets of Business Groups
Resource Allocation Efficiency
Performance Efficiency
Environmental Uncertainty

  • Receive Date 06 November 2022
  • Revise Date 15 March 2023
  • Accept Date 11 March 2023