Investigating the Asymmetric Models of Cash Holding Adjustment Speed: Dummy Variable, Quadratic and Threshold Regression Models

الموضوعات :

Milad Emamgholipour Archi ¹ (Ph.D. Student, Department of Accounting, Babol Branch, Islamic Azad University, Babol, Iran.)
Seyed Ali Nabavi Chashmi ² (Department of Management, Babol Branch, Islamic Azad University, Babol, Iran.)
Iman Dadashi ³ (Department of Accounting, University of Qom, Qom, Iran)
Maryam Shafiee Kakhki ⁴ (Department of Economic, Babol Branch, Islamic Azad University, Babol, Iran.)

تاريخ الإرسال : 23 الإثنين , جمادى الأولى, 1443 تاريخ التأكيد : 13 الإثنين , رجب, 1443 تاريخ الإصدار : 11 الإثنين , شوال, 1444

الکلمات المفتاحية: cash holding adjustment Speed, Asymmetric Models, Optimal Cash,

ملخص المقالة :

Proving helpful in an efficient management of cash in order to reach optimal cash and clearly explain relevant optimization policies, this study examined the adjustment speed of cash holding using asymmetric models. The sample consisted of 117 firms listed in Tehran Stock Exchange and their financial details over the 2009-2018 period. Once the optimal level for cash holding was identified, asymmetric models such as the dummy variable approach, the quadratic model, and the threshold regression model were employed to test the adjustment speed of cash holding. The results revealed that cash-rich firms are moving toward optimal cash at a greater speed than cash-poor firms. In addition, the results from the quadratic model showed a non-linear, skewing effect of the cash holding adjustment speed in terms of the different cash levels. Therefore, there is an optimal level of cash holding that enables firms to deviate from the cash target. Should firms fall outside the optimal cash range, cash adjustment will occur at a greater speed, and it will be both partial and asymmetric.

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