Investigate the interrelationship between management ability and economic value added using the method of simultaneous equations

One of the human resources, which plays an important role in converting the company's resources into increase income and creating wealth for shareholders, are the managers of commercial companies. Information related to the ability of company managers, such as their ability to use investment opportunities, resource provision, allocation, resource optimization, and their knowledge and experience, is one of the important and valuable dimensions of intangible assets of commercial companies. The results of recent research show that the ability to manage is one of the determinants of companies' performance. This study investigates the two-side relationship between management ability and economic value added using the method of simultaneous equations. For this purpose, the required information for the period of 2014-2018 was collected for 105 companies and the research hypothesis was tested using the method of simultaneous equations (granger-causality). The results showed significant two-side relationship between management ability and EVA, also; two side granger-causality between management ability and economic value added: p-value (0.000), with 95 percent statistical significance.