Authors : Saied Ali Ahmadi and Afsaneh Soroushyar
Abstract: One of the most important of managers’ financial decisions is determining of cash holdings. Recent studies find that deviation from optimal cash holdings can decrease market value of company and its performance. This study investigates the effect of product market competition, relative profitability firm to its industry peers and growth opportunity on the value of cash holdings. The research hypotheses are tested in Tehran Stock Exchange (TSE) for the period of 2001-2012. Using multiple regression analysis, we find that the firms with higher relative profitability and higher growth opportunity have the higher value of cash holdings. Also, the value of cash holdings in firms in low product competition industries is more than other firms.
Saied Ali Ahmadi and Afsaneh Soroushyar, 2015. Industry Structure, Growth Opportunity and the Value of Cash Holding. International Business Management, 9: 1346-1351.