Asymmetric Cash Flow Sensitivity of Cash Holdings
This research documents the asymmetric corporate cashflow sensitivity of cashholdings. Using a sample of 630 firm-years(companies in Tehran Stock Exchange were selected for years 1384 to1390) the corporate reactions to changes in their cash holdings in caseof negative and positive cash flows were ex...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | fas |
| Published: |
University of Tehran
2014-02-01
|
| Series: | بررسیهای حسابداری و حسابرسی |
| Subjects: | |
| Online Access: | https://acctgrev.ut.ac.ir/article_36588_fc664d17b83571478c32a2091b198dd5.pdf |
| Summary: | This research documents the asymmetric corporate cashflow sensitivity of cashholdings. Using a sample of 630 firm-years(companies in Tehran Stock Exchange were selected for years 1384 to1390) the corporate reactions to changes in their cash holdings in caseof negative and positive cash flows were examined. For testing thehypothesisabout asymmetric cash flow sensitivity, Riddick andWhited (2009) models were used. Results show that firms havedifferent level of responses to their cash holding when faces positiveand negative cash flow: meaning that the relation between cashholding and positive cash flow is different than relation between cashholding and negative cash flow. We document that the cash flowsensitivity of cash flow is negative when a firm faces a positive cashflow environment, and the cash flow sensitivity of cash flow ispositive when a firm faces negative cash flow. This asymmetry maybe due to several reasons, including binding project contracts, badnews withholding and agency costs. |
|---|---|
| ISSN: | 2645-8020 2645-8039 |