The effect of cash holding adjustments on managerial entrenchment

Subject Areas : Management Accounting

Ataollah Mohammadi ¹ , Nasrin Khodabandehlu ²

1 - Assistant Professor Accounting, Islamic Azad University Sanandaj Branch.
2 - Masters Accounting, Islamic Azad University Sanandaj Branch

Received: 2018-04-04 Accepted : 2018-05-31 Published : 2019-06-22

Keywords: Cash holding adjustments, managerial entrenchment, Agency theory,

Abstract :

The first problem with the agency is the existence of a conflict of interests between the shareholder and the manager that this conflict of interest may even lead to information asymmetry. That is, the shareholder seeks to reach the highest level of investment value and the manager is also looking to increase his wealth according entrenchment theory. The purpose of this study was to investigate the effect of cash holding adjustments and management entrenchment. This research is an applied research in terms of purpose and is one of the descriptive-correlative researches. The data of 118 companies listed in Tehran Stock Exchange for the period of 2009 to 2016 were collected. In this study, for the purpose of measuring management management, two indicators of CEO duality and manaders's shareholding percentage have been used by for entrenchment. The results show that cash holding adjustments affect managerial entrenchment. The speed of cash holding adjustments is also influenced by management fronts. In fact, the results showed that the moderation and the rate of holding of cash on managerial entrenchment in Tehran Stock Exchange is influential.

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