M.A. Thesis:

Management ability, business risk, and credit risk

In this study, regarding to the important role of managers in achieving companies' purposes, the relationship between the ability of management and the business risk and credit risk was investigated. In fact, in this study, this assumption was made that understanding the strategies associated with achieving business goals and managing financing cost is an effect of management ability. In this regard, data of 172 published companies in Tehran stock exchange have been studied from 2012 to 2016. The ability of managers was measured by using the modal of Damerjian et al (2012). Also, asset returns are used as a measure of financial performance and the ratio of financing cost to debt is used to measure credit risk. The hypothesis were taken with using the regression modal and fitted them with Data Panel and fixed effects. Finding of this fit showed that there is a meaningful negative relation between management ability and business risk. However, there is no meaningful negative relation between management ability and credit risk. This findings can be considered as a truth for the theory of rented search in Tehran stock exchange.

Keywords: management ability, data covering analysis, business risk, financial performance, credit risk.