Monetary & Financial Economics

The Impact of Corporate Governance on Corporate Resilience Against Economic Shocks: A Dynamic GMM Approach in the Tehran Stock Exchange

Articles in Press

Document Type : Original Article

Authors

Mohammadreza Bayat 1
Hamidreza Torabi 2
Albert Boghosian 3

1 Department of Theoretical Economics, Faculty of Economics, University of Tehran, Tehran, Iran

2 M.Sc. in financial managment, Shahid

3 assistant professor, University of Tehran, Kish international campus

https://doi.org/10.22067/mfe.2026.100135.1715
Abstract
This study examines the impact of corporate governance quality on the resilience of firms listed on the Tehran Stock Exchange against economic shocks. Using a balanced panel dataset of 150 companies over the period 2011–2024 — encompassing shocks such as the COVID-19 pandemic, severe exchange rate fluctuations, and sanctions — and employing the Generalized Method of Moments (GMM) to address endogeneity and dynamic effects, the results indicate that board independence and the overall corporate governance score have a significant positive effect on a composite resilience index (comprising recovery speed, profitability volatility, and bankruptcy probability). Conversely, high ownership concentration and high financial leverage exert a significant negative effect on resilience. The economic crisis index also directly reduces resilience; however, strong corporate governance substantially moderates this negative effect. The primary contribution of this study lies in the multidimensional measurement of corporate resilience and the examination of corporate governance mechanisms in reducing the vulnerability of Iranian firms to economic shocks. An additional innovation is the application of the GMM model within the context of Iran’s emerging market, combined with a multidimensional resilience index. The findings emphasize that strengthening corporate governance mechanisms can serve as a key strategy for enhancing firms’ resistance to economic shocks.

Keywords

Corporate Governance
Organizational Resilience
Economic Shocks
GMM Model
Tehran Stock Exchange
Subjects
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Monetary & Financial Economics

Articles in Press, Accepted Manuscript
Available Online from 27 September 2026

  • Receive Date 28 July 2026
  • Revise Date 09 September 2026
  • Accept Date 22 September 2026

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