The relationship between management ability and investment opportunities with an emphasis on the role of political connection

Purpose: With the expansion of the quality level of activity as well as thewidespread development of economic affairs, financial and investmentdecisions are among the most complex issues that arise in order to obtain thebest return and desirability in the best conditions. In this regard, financialmanagers, given the primary responsibility for these decisions, seek to establishrelationships between the factors of the firms in the firm, including investmentopportunities. The purpose of this paper is to examine the relationship betweenmanagement ability and political connection with investment opportunities. TheQT ratio and market to book ratio (MTB) are used to measure corporateinvestment opportunities.Methodology: Corporate political connection is defined by Fasio's politicalcost variables and the use of the TOPSIS multi-criteria decision-making modelsand the Shannon entropy weighting method. In order to test the hypotheses,116 companies listed in Tehran Stock Exchange during the period 2014-2019were selected for the sample.Findings: The results of the analysis using the generalized least squares hybridregression (GLS) method indicate that there is a significant and positiverelationship between management ability and investment opportunities inTehran Stock Exchange companies. There is a negative and significantrelationship between political connection and investment opportunities. Thepolitical connection also does not affect the relationship between managementability and investment opportunities.Originality/Value: The purpose of this paper is to examine the relationshipbetween management ability and political connection with investmentopportunities. The QT ratio and market to book ratio (MTB) are used tomeasure corporate investment opportunities.

The relationship between management ability and investment opportunities with an emphasis on the role of political connection Keywords:

Management Ability , Investment Opportunities , Political Connection