Investigating the effect of macroeconomic factors on cash holding in Tehran stock exchange

Subject Areas : Financial Markets and Institutions

Hadi Memari ¹ , Seyyed Mozaffar Mirbargkar ² , Mohammad Reza Vatanparast ³

1 - Department of Finance, Rasht Branch, Islamic Azad University, Rasht, Iran.
2 - Department of Business Management, Rasht Branch, Islamic Azad University, Rasht, Iran.
3 - Department of Accounting, Rasht Branch, Islamic Azad University, Rasht, Iran.

Received: 1402-02-22 Accepted : 1402-07-01 Published : 2023-08-23

Keywords: Tehran Stock Exchange, Cash Holding, Macroeconomic factors, Corporate Factors,

Abstract :

Purpose: The purpose of this research is to investigate the effect of macroeconomic factors on cash holding in companies listed on the Tehran Stock Exchange.Research methodology: A sample of 151 companies admitted to the Tehran Stock Exchange was selected between 2008 and 2018. Then, using inferential statistics methods, 6 hypotheses related to macroeconomic factors were investigated.Findings: Interest rate, recession, gross domestic product, economic liquidity, exchange rate and inflation had an effect on cash holding, so that the factors of interest rate and gross domestic product had an inverse and significant effect on cash holding and Recession, economic liquidity, exchange rate and inflation had a positive and significant effect on cash holding.Originality / value: The current research develops previous studies in the field of cash holding and improves the existing knowledge in the field of cash management in companies. In this study, the effect of macroeconomic factors on cash holding in Tehran Stock Exchange companies over a period of time has been investigated. Also, the effect of factors such as GDP, economic liquidity and exchange rate on cash retention was investigated for the first time in Iran. The results of the research can be a guide for newly established companies in terms of effective cash holding policy.

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