The Efficiency of Inventory Management and Financial Distress: The Interactive Role of Management Behavioral Strains

Document Type : Research Paper

Authors

1 Assistant Professor in Accounting, Faculty of Economics and Management, Urmia University, Urmia, Iran

2 M.S. in Management Accounting, Faculty of Economics and Management, Urmia University, Urmia, Iran

Abstract

The objective of this study was to examine the effect of inventory management on financial distress with respect to the interactive role of management behavioral strains, namely overconfidence, myopia, and narcissism. The data of the study was comprised of 346 year-distressed company and 346 year-healthy company for overconfidence, 356 year-distressed company and 356 year-healthy company for myopia, and 228 year-distressed company and 228 year-Health Company for narcissism, chosen from the companies listed in Tehran Stock Exchange through the years 2009 to 2019. To distinguish the healthy companies from the distressed companies, the model developed by Asquith et al. (1994) was used. Findings of the study showed that the increase of inventory management efficiency leads to decreased financial distress, and the behavioral strains do not have a significant effect on the change of such a relationship.

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References

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Interdisciplinary Journal of Management Studies (Formerly known as Iranian Journal of Management Studies)
Volume 15, Issue 2
April 2022
Pages 253-269

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