Modeling the impact of managerial stability on the risk of free cash flow and the value of listed companies in the Iran and Iraq: A comparative analysis approach

Document Type : Research Paper

Authors

1 PhD student, Urmia University, Faculty of Economics and Management, Department of Accounting, Urmia, Iran.

2 Associate Professor, Urmia University, Department of Accounting, Faculty of Economics and Management, Urmia, Iran

3 Assistant Professor, Urmia University, Department of Accounting, Faculty of Economics and Management, Urmia, Iran.

Abstract

This study investigates the effect of managerial stability on free cash flow risk and firm value in Iranian and Iraqi listed companies, using a comparative approach. Data from 140 Iranian companies (2016–2023) and 29 Iraqi companies were analyzed using advanced artificial intelligence (AI) techniques and spatial econometric models. The results indicate managerial stability significantly reduces free cash flow risk and increases firm value in both markets. However, the effect’s intensity and pattern differ between markets. In Iraq, managerial stability has a stronger effect with notable spatial effects, while in Iran, the effect is weaker with competitive behavioral risk and complementary behavioral value patterns. In both countries, reinforcement learning outperforms other methods. Model accuracy is higher in Iran (94%) than Iraq (90%), likely due to data quality and market transparency. Managerial stability reduces risk and enhances value, with effectiveness varying by market conditions. Policymakers and managers should leverage AI and data platforms to optimize managerial decisions, risk management, and value creation.

Keywords

Main Subjects

References

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Journal of Accounting Advances
Volume 17, Issue 1
2025
Pages 263-309

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History

  • Receive Date: 15 April 2025
  • Revise Date: 27 July 2025
  • Accept Date: 20 August 2025

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