The Moderating Role of Firm’s Size and Age in the Relationship of Managerial Ownership with Liquidity and ‎Investment Constraints ‎

Ownership of management through shares aligns the shareholders’ interests with those of managers. Thus, whenever manager’s ownership increases, the company performance increases, leading to a reduction in agency costs related to investment decisions. Companies do this through better managerial agreement with shareholders' motivations. This study investigated the effects of managerial ownership on liquidity and investment constraints and examined the effects of moderating the role of a firm’s size and age on this relationship among companies listed on Tehran Stock Exchange (TSE). To this end, the index of investment sensitivity to cash flow was employed for calculating the liquidity constraint. The research was conducted on 82 companies listed on TSE from 2010 to 2019. The hypotheses were tested by using linear regression and Eviews software. There was a significant relationship between managerial ownership and investment, but the firm’s size and age did not affect this relationship. There was no significant relationship between managerial ownership and liquidity constraints and the firm’s size did not affect this relationship either; however, the firm’s age had a significant effect on this relationship.