Investigating the Effect of Management Entrenchment on Speed of Cash Holding Adjustment in Companies Listed in Tehran Stock Exchange

Abstract

In this study, the effect of management entrenchments on the speed of cash holding adjustment in Iran has been investigated. After designing the management entrenchment evaluation indicators, the transaction information was collected from the Stock Exchange in the five-year period of 2011-2015. The statistical sample consists of 155 companies selected by systematic deletion method. In this research, linear regression and correlation have been used to investigate the hypotheses of the research. Also Eviews software was used to analyse the data and test the hypotheses of the research. What can be summarized in the overall conclusion of the research hypothesis test is that the indicators of management entrenchments including deviation from target cash, deviation from target cash in companies with high financial leverage, deviation from target cash in companies with high free cash flows, deviation from target cash interacting the company size and deviation from target cash interacting the firm performance have a significant effect on the speed of cash holdings adjustment