Cash Holding, Firm Value and Performance under Financial Constraint: A Case Study of the Iranian Capital Market
Purpose: The present study was conducted to gather evidence to investigate the relationship between cash holdings, firm value, and financial performance of companies' constraints in financing the Iranian capital market.Methodology: This study was investigated for 91 companies (number of observa...
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| Main Authors: | , |
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| Format: | Article |
| Language: | fas |
| Published: |
Ayandegan Institute of Higher Education, Tonekabon,
2022-02-01
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| Series: | مدیریت نوآوری و راهبردهای عملیاتی |
| Subjects: | |
| Online Access: | http://www.journal-imos.ir/article_140271_90fae5f179a1b1cbe3d5b9099fc6efda.pdf |
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| Summary: | Purpose: The present study was conducted to gather evidence to investigate the relationship between cash holdings, firm value, and financial performance of companies' constraints in financing the Iranian capital market.Methodology: This study was investigated for 91 companies (number of observations 728) in 8 years between 2012 and 2019. Also, panel data regression was used to test the relationships between variables.Findings: The results indicate a nonlinear relationship between cash holdings and performance, and this relationship is inverted U-shaped. Also, this relationship has existed with the performance variable (ROE) as an alternative variable. This study shows a negative relationship between the non-optimal level of cash holdings and financial performance. The results indicate that companies with financial constraints hold cash holdings, which will reduce financial performance.Originality/Value: Evidence of a nonlinear relationship between firm performance and cash holdings under company-specific conditions gives managers and investors the insight to examine the performance of companies, future value, and how they make decisions in certain circumstances, such as financial constraints for companies |
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| ISSN: | 2783-1345 2717-4581 |