Using A Multivariate Statistical Method of Factor Analysis and Grounded Theory to Review the Theory of Agency in Developing Countries (A Case Study of Iran)

The information asymmetry between managers and shareholders has a significant impact on the company s investment decisions and exacerbates agency problems. These problems are believed to be more prevalent in developing markets like Iran compared to developed markets. This research aims to explore the theory of agency in Iran through an exploratory study. The research methodology follows a qualitative approach for data acquisition, followed by qualitative study and analysis, quantitative approach, and factor analysis to validate the extracted model. The statistical analysis of the research data reveals that several hypotheses of agency theory, such as risk aversion, supervision, and reward, exhibit similar dimensions in Iran as observed in developing countries. The results confirm the following assumptions: 1. Conflict of interests between managers and owners, 2. Information asymmetry, 3. Reverse choice, 4. Ethical risk, 5. Maximizing expected utility, 6. Forcing, and 7. Inability to predict the future and receive information. The existence of information asymmetry, higher investment risks for minority shareholders, and transparency issues necessarily confirm the lack of ability to predict the future and receive information.