The association between excess Cash holding and shareholder value: The case of Tehran security exchange

Cash is one of the most crucial resources in every enterprise and making abalance between available cash and its requirements is the most important criteriafor safety economic in every entity. All the companies that have enough cash fortheir operation and those that hold cash more than their need, have some troubles.So in this study the elements that may have influence on cash holding and theassociation between persistent excess cash holding on the Tehran securityexchange were examined for achieving this target. Regard to existing constraints.73 companies for a seven years period (1384-1390) were selected as sample. Withrespect to the data, fixed effect regression was used. Our result show that there is apositive and significant association between firm size, net working capital,operating cash flows and financing cash flows with cash holding and variables suchas leverage, growth option, variability of cash flows, close cash substitutes andlevel of investment opportunities have no significant relationship with cashholding. Furthermore the results of second part of this research shows that excesscash holing in both form of transitory and persistent have no influence onshareholder value.