Financial Accounting
Abbas Aflatooni; Zahra Nikbakht; Kefsan Mansouri
Abstract
The existence of firms' excess cash causes resources to stagnate and, cash deficit causes loss of investment opportunities. Therefore, firms generally try to maintain an optimal level of cash holdings. In addition, firms attempt to quickly correct any deviations from the optimal level of cash holdings. ...
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The existence of firms' excess cash causes resources to stagnate and, cash deficit causes loss of investment opportunities. Therefore, firms generally try to maintain an optimal level of cash holdings. In addition, firms attempt to quickly correct any deviations from the optimal level of cash holdings. The level of cash holdings and the speed of correcting the gap between the actual and the optimal level of cash holdings depend on several factors. The purpose of this study is to investigate the effect of the firm's business strategies (defenders and prospectors) on the level of cash holding and its speed of adjustment. In this regard, the data of 120 firms listed on the Tehran Stock Exchange (TSE) during 2013-2020 (960 firm-years) have been used. The static models are estimated using ordinary least squares (OLS) estimator and, the system generalized method of moments estimator (GMM) is used to estimate dynamic models. The results show that the prospectors have a smaller cash holdings ratio than defenders, and also, the prospectors have lower cash holdings speed of adjustment than defenders. The results of supplementary tests that confirm the research's main findings are consistent with the predictions made in trade-off theory.
Nezamedin Rahimian; Mahmood Ghorbani; Keyvan Shbani
Volume 10, Issue 40 , January 2014, , Pages 151-175
Abstract
Cash is one of the most crucial resources in every enterprise and making a balance between available cash and its requirements is the most important criteria for safety economic in every entity. All the companies that have enough cash for their operation and those that hold cash more than their need, ...
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Cash is one of the most crucial resources in every enterprise and making a balance between available cash and its requirements is the most important criteria for safety economic in every entity. All the companies that have enough cash for their operation and those that hold cash more than their need, have some troubles. So in this study the elements that may have influence on cash holding and the association between persistent excess cash holding on the Tehran stock exchange were examined for achieving this target. Regard to existing constraints. 73 companies for a seven years period (1384-1390) were selected as sample. With respect to the data, fixed effect regression was used. Our result show that there is a positive and significant association between firm size, net working capital, operating cash flows and financing cash flows with cash holding and variables such as leverage, growth option, variability of cash flows, close cash substitutes and level of investment opportunities have no significant relationship with cash holding. Furthermore the results of second part of this research shows that excess cash holing in both form of transitory and persistent have no influence on shareholder value.
Hassan Hemati; Zohreh Yosefirad
Volume 9, Issue 33 , April 2011, , Pages 127-148
Abstract
The aim of this study is to investigate the relationship between diversification strategy and cash holding with abnormal return of TSE listed companies. For this purpose, three hypotheses were developed to investigate the relationship between diversification strategy and cash holding with abnormal return ...
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The aim of this study is to investigate the relationship between diversification strategy and cash holding with abnormal return of TSE listed companies. For this purpose, three hypotheses were developed to investigate the relationship between diversification strategy and cash holding with abnormal return of companies and the sample data were extracted from financial statement of listed Companies during the period 2004 to 2008. Results revealed that there is a negative and significant relationship between abnormal returns and diversification strategy, but relationship between abnormal returns and cash holding was not statistically significant. The results also revealed that diversification strategy has positive and significant impact on the relation between abnormal returns and cash balance.
