The Relationship between Social Crises and Quality of Managers' Financial Decision-Making: The Mediating Role of Financial Crisis

Managers may be more inclined to adopt conservative financial policies in response to social crises and unstable conditions. Such an approach can reduce corporate investments, growth opportunities, and available financial resources, ultimately exerting a negative impact on firms’ financial performance through management’s financial decisions. The primary objective of this paper is, therefore, to examine the mediating role of financial crises in the relationship between social crises and the quality of managers’ financial decision-making. The study population comprises companies listed on the Tehran Stock Exchange (TSE) from ۲۰۱۸ to ۲۰۲۳. A systematic elimination method was employed to select the research sample. For data analysis, EViews ۱۰ software and multiple regression models were utilized. The empirical results reveal a significant negative association between social crises and the quality of managers’ financial decision-making. In contrast, a significant positive association is observed between social crises and financial crises. However, as the financial crisis variable was not statistically significant in the regression analysis involving both the independent and mediating variables, the mediating role of financial crises in the association between social crises and the quality of financial decision-making by managers is rejected. This study contributes to managerial and policy perspectives by providing deeper insights into the challenges associated with decision-making and by helping to bridge the existing information gap in this domain. The findings underscore the importance of managers adopting more effective strategies during unstable and crisis conditions to ensure operational continuity and enhance organizational resilience. In practical terms, developing flexible financial programs that enable firms to adjust rapidly to sudden changes is essential. Additional measures include strengthening risk management systems, establishing financial reserves, reducing unnecessary costs, and prioritizing investment projects with faster payback periods. The novelty of this research lies in being the first to investigate the impact of social crises on the quality of managers’ financial decision-making (financial performance), while simultaneously examining the mediating role of financial crises—an issue previously unexplored in either domestic or international studies.

کلیدواژه ها:

Decision-making ، Financial Crisis ، quality of financial decision-making ، social crises