Document Type : Research Paper
Abstract
The main purpose of this paper is to examine the changes in cash holding due to the changes in firm's negative and positive cash flows which have limited access to financial resources. This paper also studies the effects of institutional shareholder, which is one of the corporate governance monitoring mechanism, on cash flow sensitivity of cash. In other word, whether shareholder can affect the amount of cash holding according to positive and negative cash flows through effective monitoring or not? In order to achieve these goals, the paper proposes three hypotheses and considered a sample which consists of 158 listed companies in Tehran stock exchange from 1386 to 1390. Firms were categorized to financially constrained and unconstrained, based on three criteria: firm size, Dividend-profit ratio and debt ratio. The results suggest that the level of cash holdings depends on the other company's factors. Positive or negative operating cash flow, existence financial constraints and institutional shareholders as corporate governance monitoring mechanism haven’t important effect on cash holdings.
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