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Paper Information

Journal:   THE IRANIAN ACCOUNTING AND AUDITING REVIEW   summer 2017 , Volume 24 , Number 2 ; Page(s) 363 To 382.
 
Paper: 

The Relation between Over-Investment and Marginal Value of Cash Holdings and Role of Corporate Governance

 
 
Author(s):  Mousavi Shiri Seyd Mahmoud*, Mostafavi Niloofar, Yazdani Mahdieh
 
* Payamnoor University of Mashhad, Mashhad, Iran
 
Abstract: 
This study examines the relationship between marginal value of cash holdings and overinvestment as well as corporate governance of firms in the capital market (i. e. the Tehran Stock Exchange). The aim of this paper is to evaluate whether cash holdings have different value creation potential for firms with overinvestment and underinvestment and whether corporate governance can moderate this value creation potential. Results of the present research could give investors new insights into the value creation potential of cash holdings policy. Employing panel data analysis on a sample of 162 quoted firms during 2009 to 2015 in R statistical software, our findings demonstrate that there is no significant difference between firms with overinvestment and those with underinvestment in terms of marginal value of cash holdings. Moreover, our findings indicate that there is a negative and significant relationship between marginal value of cash holdings and overinvestment in firms overinvesting in stock. We also provide some evidence that while the latter finding can be moderated by institutional investors, auditor reputation and corporate board of directors’ independence have no significant bearing on it.
 
Keyword(s): Cash holdings,Corporate governance,Excessive investment,Less than investment,Marginal value of cash holdings
 
 
References: 
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Cite:
APA: Copy

Mousavi Shiri, S., & Mostafavi, N., & Yazdani, M. (2017). The Relation between Over-Investment and Marginal Value of Cash Holdings and Role of Corporate Governance. THE IRANIAN ACCOUNTING AND AUDITING REVIEW, 24(2 ), 363-382. https://www.sid.ir/en/journal/ViewPaper.aspx?id=654926



Vancouver: Copy

Mousavi Shiri Seyd Mahmoud, Mostafavi Niloofar, Yazdani Mahdieh. The Relation between Over-Investment and Marginal Value of Cash Holdings and Role of Corporate Governance. THE IRANIAN ACCOUNTING AND AUDITING REVIEW. 2017 [cited 2021April20];24(2 ):363-382. Available from: https://www.sid.ir/en/journal/ViewPaper.aspx?id=654926



IEEE: Copy

Mousavi Shiri, S., Mostafavi, N., Yazdani, M., 2017. The Relation between Over-Investment and Marginal Value of Cash Holdings and Role of Corporate Governance. THE IRANIAN ACCOUNTING AND AUDITING REVIEW, [online] 24(2 ), pp.363-382. Available: https://www.sid.ir/en/journal/ViewPaper.aspx?id=654926.



 
 
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