The Investigation of the Relationship between the Value of Cash Holding and EVA Performance Evaluation of Companies Listed in Tehran Stock Exchange

Document Type : Research Paper

Authors

1 Graduated Mater Student, Accounting Department, Shahr-e-qids Branch, Islamic Azad University, Tehran, Iran

2 Department of Management, Shahr-e-Qods Branch, Islamic Azad University, Tehran, Iran. (Correspondence Author)

Abstract

This paper investigates the effect of the economic value added (EVA) performance evaluation on the value of the cash holdings of Tehran Stock Exchange firms. The aim of this study is to investigate the influence of the underinvestment modification and overinvestment restraint on cash holding. To do so, Pinkowitz and Wiliamson model was used to investigate 127 companies between 2004 and 2013. This study is applied in purpose and descriptive correlational in method. Eviews software was used to analyze the data. The results of the study show that economic value added performance evaluation decreases the underinvestment and the overinvestment of Tehran Stock Exchange firms and on the other hand, economic value added performance evaluation increases the value of cash holding. This study contributes to the emerging literature related to cash holdings and the economic consequences of the economic value added performance evaluation policy. It expands the literature related to investor protection in countries experiencing economic transition.

Keywords

References

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Financial Management Strategy
Volume 4, Issue 1 - Serial Number 12
September 2016
Pages 123-139

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History

  • Receive Date: 20 December 2015
  • Revise Date: 12 June 2016
  • Accept Date: 07 September 2016

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