Investigate the relationship between management ability and financial constraints and cash holding value

Subject Areas : Journal of Capital Market Analysis

alireza  hassan maleki ¹ (Assistant Professor of Accounting, Islamic Azad University, Bandar Gaz Branch, Iran)
ali  haghani ² (Master student of accounting, Islamic Azad University, Bandar Gaz Branch, Iran.)

Received: 2022-06-23 Accepted : 2022-11-21 Published : 2022-11-22

Keywords: Management Ability, : financial constraints, cash holding value,

Abstract :

AbstractThe purpose of this research is to investigate the relationship between management ability with financial constraints and cash holding value. Demarjian et al.'s model was used to measure management ability, Falkander and Wong's model was used to measure cash holding value, and White and Wu's index was used to measure financial constraints. The statistical population of the research was all the companies admitted to the Tehran Stock Exchange in the period from 2014 to 2019, and the purposeful elimination method was used to determine the size of the statistical sample. Finally, 151 companies were selected as a statistical sample. The statistical results showed that management ability in companies reduces financial restrictions and improves cash holding value. Hence, it can be concluded that the ability of management becomes an important factor in improving the company's investment decisions and the efficiency of its operations. The selection of capable managers has led to an increase in efficiency and productivity in the company, which can lead to the success of the company in the industry.