The Impact of Strategic Deviance on Corporate Cash Holdings

Subject Areas :

Younes  Badavar Nahandi ¹ (Associate Professor, Department of Accounting,Tabriz Branch, Islamic Azad University, Tabriz, Iran)
Shahla  Abbaszadeh ² (Department of Accounting, Instructor, Technical and Vocational University, Tehran, Iran.)
Elmira  Shahamifar ³ (Master of Accounting, Institute of Higher Education Daneshvaran, Tabriz, Iran)

Received: 2022-06-03 Accepted : 2022-11-05 Published : 2022-08-23

Keywords: Value of Cash Holding, Strategic Deviance, Level of Corporate Cash Holding,

Abstract :

Today, the amount of cash assets held by companies and its affecting factors are the important issues that have been considered in the financial literature. Therefore, the purpose of this study is to determine the effect of strategic deviation on the level and value of cash holdings. This research is an applied research in terms of purpose, causal research in terms of methodology, and is post- event in terms of research time. Research hypotheses were analyzed using a sample of 120 companies accepted in Tehran Stock Exchange during 2014-2020 and using multi-variable regression model based on panel data techniques using Stata and Excel softwares. The results show that the strategic deviation has a significant and negative effect on cash holding, but it does not affect the value of cash holding in the market. It can be concluded that amount of deviation in the operations of a company compared to industry can be caused by incentive trading and it does not affect the value of holding cash fund of the company in the general.