Exploring the Trajectory from Causes to Outcomes of Totalitarian Corporate Governance in the Context of Iran’s Capital Market

Abstract

The purpose of this study is to present a framework for understanding the trajectory from causes to outcomes of totalitarian corporate governance within the context of Iran’s capital market. From a methodological perspective, this study is considered a mixed-method investigation and, through the implementation of the grounded theory process based on the approach of Anselm Strauss and Juliet Corbin (1998), seeks to provide a paradigmatic framework for a deeper understanding of corporate governance mechanisms in Iran’s capital market. Through expert interviews and the execution of three stages of coding, the study attempted to identify five dimensions—including causal conditions, contextual conditions, intervening conditions, strategies, and consequences—within a theoretical framework. Subsequently, using a simple random sampling method, financial managers and heads of accounting departments of capital market companies, on the one hand, and technical experts of the capital market, on the other hand, were selected as the target population of the quantitative section of the study. The developed checklists, based on the convergence of core components with the identified conceptual themes, were distributed among these participants in order to establish paradigmatic dimensions through rotated matrix combinations and exploratory/confirmatory factor analysis coefficients. The research findings, following interviews and the three-stage coding process conducted to present the identified dimensions within a paradigmatic framework, utilized two criteria—Content Validity Index (CVI) and test–retest reliability coefficient—to confirm the identification of 65 conceptual themes derived from 401 open codes generated during the interviews, organized into 13 core components and 6 structural categories within the paradigmatic model. Furthermore, after conducting exploratory and confirmatory factor analyses indicating satisfactory structural model fit, the convergence among core components in relation to the identified conceptual themes was also confirmed through orthogonal and oblique rotation processes in factor analysis and through the integration of matrix scales with a five-point Likert scale. These findings demonstrate that the proposed paradigmatic model possesses generalizability within the study context. The results obtained from the final paradigmatic model indicate that the development and expansion of totalitarian corporate governance within the capital market may be the outcome of endogenous and exogenous functions that create the conditions for the growth and expansion of authoritarian corporations. Such corporations prioritize the preservation of the interests of founders and power structures emerging at the apex of capital market companies, while disregarding the interests of minority shareholders and investors.