The Effect of Managerial Ownership on Corporate Financialization: The Moderating Role of Corporate Technological Innovation
Keywords:
managerial ownership, corporate financialization, technological innovation, panel data, Tehran Stock ExchangeAbstract
This study examines the effect of managerial ownership on corporate financialization and investigates whether corporate technological innovation moderates this relationship. Corporate financialization reflects the increasing allocation of corporate resources to financial assets and financial activities rather than to core operating activities. Using a panel dataset of 120 non-financial firms listed on the Tehran Stock Exchange from 2016 to 2023, corresponding to 960 firm-year observations, the study estimates panel regression models in which corporate financialization is measured as the ratio of financial assets to total assets. Managerial ownership is measured as the proportion of shares held by managers, while technological innovation is proxied by research and development intensity and intangible assets. The results show that managerial ownership has a significant negative association with corporate financialization. This finding suggests that when managers hold equity stakes, they may become more oriented toward preserving operational assets and long-term firm-specific resources rather than expanding financial-asset holdings. The interaction results further indicate that technological innovation significantly moderates this association: innovation weakens the negative relationship between managerial ownership and financialization. This pattern suggests that innovation-oriented firms may use financial assets not only as speculative instruments but also as liquidity buffers that support technological development and strategic flexibility. The findings contribute to the literature on corporate governance, financialization, and innovation in emerging capital markets by showing that the effect of managerial ownership on financialization depends on firms’ technological orientation.
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