Developing a Model for Measuring Moral Hazard of Managers Based on Financial Data in Companies Listed on the Tehran Stock Exchange

The purpose of this study is to provide a model for measuring the moral hazard of managers based on financial data. For this purpose, based on the literature, theories, and surveys of experts across the country, 22 variables of the source of moral hazard of managers were extracted and re-exposed to the comments of experts to rate the variables in terms of importance. 9 variables were selected based on the preference of experts and using the group Analytical Hierarchy process (GAHP), appropriate coefficients were assigned to each of the selected variables and the initial model was obtained. Finally, the obtained model was validated through the identified consequences. The information of the final model, which includes the variables of ownership structure, environmental uncertainty, monopoly in the product market, financial constraints, leverage ratio, free cash flows, capital expenditures, internal risk of the company, and life cycle of the company, is collected from Tehran Stock Exchange. The relationship between the number obtained from the model and the consequences of moral hazards was investigated and it was found that there is a positive and significant relationship with information asymmetry and stock price crash risk and a negative and significant relationship with investment efficiency. As a result, the proposed model can be effective for decisions, especially in the capital market. By making it possible to measure the moral hazard of managers, the necessary measures can be taken to reduce it through the establishment of strong corporate governance mechanisms for control and supervision.