Net Working Capital Investment Policies, the Value of Financial Flexibility and Financial Constraint, Evidence From the Tehran Stock Exchange
محورهای موضوعی : Financial and Economic Modelling
Maryam Karimi
1
,
Rasoul Karami
2
,
Mehdi Basirat
3
,
Allah Karam Salehi
4
1 - Department of Accounting, Ahvaz Branch, Islamic Azad University, Ahvaz, Iran
2 - Department of Accounting, Abadan Branch, Islamic Azad University, Abadan, Iran
3 - Department of Economics, Ahvaz Branch, Islamic Azad University, Ahvaz, Iran
4 - Department of Accounting, Masjed-soleiman Branch, Islamic Azad University, Masjed-soleiman , Iran
کلید واژه: Value of Financial Flexibility , Net Working Capital , Financial Constraint,
چکیده مقاله :
Companies pay attention to the value level of financial flexibility in making decisions related to optimizing investments and applying their net working capital policies. This issue will make profitable investment opportunities for companies more efficient and enable companies to gain more efficiency, as well as apply more optimal policies to keep cash. The purpose of this research is to investigate the effect of financial flexibility value and financial constraint on the speed of adjustment of net working capital, as well as the effect of financial constraint on the relationship between the value of financial flexibility and the speed of adjustment of net working capital in companies listed on the Tehran Stock Exchange. The appropriate pattern recognition test in combined data indicates the use of the regression model of the research using the panel data method with the fixed and random effects approach for the panel and pooled data patterns to estimate the regression model. The statistical sample includes 100 companies accepted to the Tehran Stock Exchange during the period from 2005 to 2020. The findings indicate that the value of financial flexibility has a positive and significant effect on the speed of adjustment of net working capital in the models of partial adjustments and error correction. Financial constraint has a positive and significant effect on the speed of net working capital adjustment, and it also has a positive and significant effect on the relationship between the value of financial flexibility and the speed of net working capital adjustment.
Companies pay attention to the value level of financial flexibility in making decisions related to optimizing investments and applying their net working capital policies. This issue will make profitable investment opportunities for companies more efficient and enable companies to gain more efficiency, as well as apply more optimal policies to keep cash. The purpose of this research is to investigate the effect of financial flexibility value and financial constraint on the speed of adjustment of net working capital, as well as the effect of financial constraint on the relationship between the value of financial flexibility and the speed of adjustment of net working capital in companies listed on the Tehran Stock Exchange. The appropriate pattern recognition test in combined data indicates the use of the regression model of the research using the panel data method with the fixed and random effects approach for the panel and pooled data patterns to estimate the regression model. The statistical sample includes 100 companies accepted to the Tehran Stock Exchange during the period from 2005 to 2020. The findings indicate that the value of financial flexibility has a positive and significant effect on the speed of adjustment of net working capital in the models of partial adjustments and error correction. Financial constraint has a positive and significant effect on the speed of net working capital adjustment, and it also has a positive and significant effect on the relationship between the value of financial flexibility and the speed of net working capital adjustment.
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