The Effectiveness Test of Customer Concentration on Cash Holdings Adjustment Speed In Listed Companies In Tehran Stock Exchange

Document Type : Research Paper

Authors

Accounting Department, Faculty of Management, University of Tehran, Tehran, Iran

Abstract

The customer concentration can increase the cash input flow risk, the need to additional cash holdings and the risk of corporate future financial crisis, which could in turn affect cash holdings level and cash holdings adjustment speed. The purpose of this study was to examine the effectiveness test of customer concentration on cash holdings adjustment speed in listed companies in Tehran Stock Exchange. In this regard, 140 companies (980 firm-year observations) accepted in the Tehran Stock Exchange during the period from 2011 to 2017 were investigated. In order to test the hypotheses of the research, multiple linear regression model using combined data (panel method) was used. The results of this research indicate that the customer concentration on cash holdings level and cash holdings adjustment speed has positive and significant effect. In other words, in companies with major customer, cash holdings level and cash holdings adjustment speed are higher. These results can explain the importance and effectiveness of the role the company major customers in increasing the cash holdings level and cash holdings adjustment speed.

Keywords

References

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History

  • Receive Date: 24 November 2018
  • Revise Date: 27 March 2019
  • Accept Date: 13 April 2019

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