The Survey Relationship between Growth Opportunities, Corpo-rate Risk and Changes in Cash Holdings

Document Type : Research Paper


Department of management,Shar-e-QodsBranch,Islamic Azad University


The aim of this study was to investigate the relationship between growth opportunities, risks, and relative changes in the Company's cash assets. This study is a literature study and analysis was based on an analysis of panel data. In this study, a financial data of 112 companies listed in Tehran Stock Exchange during the period 2009 to 2014 have been reviewed. The results in relation to the first hypothesis of the present study suggest that between growth opportunities and significant relationship of changes in cash holdings is straight forward. Also according to the analysis done in relation to the second hypothesis, we determined that between now and the risk of changes in cash holdings is an inverse relationship.


[1]. Abor, J. & Biekpe, N, How do we explain the capital structure of SMEs in sub- Saharan Africa?: Evidence from Ghana, Journal of Economic Studies, 2009, 36(1), P.  83–87.
[2]. Acharya, V.V., Heitor Almeida, H. & Campello, M., Is cash negative debt? A hedging perspective on corporate financial policies. Journal of Financial Intermediation. 2007, 16, P. 515-554.
[3] Anderson, R.C., Bizjak, J.M., Lemmon, M.L. and Bates, T.W., Corporate Governance and Firm Diversification, 1998, SSRN: or
[4]. AhmadPour, A. The Systematic Risk Estimation Model Using Accounting Information. Tehran, Accounting Doctoral Thesis, Tarbiyat- Modarress University. 1999.
[5]. Aghaee, M.A., Nezafat, A.R., Nazemi-Ardakani, M., Javan, A. The Review of Factors Affecting the Balance of Cash Maintenance in Companies Listed on the Tehran Stock Exchange. Financial Accounting Research Journal, 2009, (2), P. 53-70.
[6 ]. Almeida, H., Campello, M. & Weisbac, M.S. The Cash Flow Sensitivity of Cash. The Journal of  Finance  2004. 4,P. 1777-1804.
[7]. Azar,A, Moemeni, M., Statistics and Its Application in Management, Samt Publications, 9th edition, Tehran, 2006.
[8]. Baum, C., Schafer, D., Talavera, O. The Effects of Industry-Level Uncertainty on Cash Holdings: The Case of Germany. Working Paper, German Institute of Economic Research. 2006.
[9]. Bigelli, M and  Sanchez, V.J, Cash holdings in private firms. Journal of Banking & Finance, 2012, 36, P. 26–35.
[10]. Brav. O.Access to Capital, Capital Structure, and the Funding of the Firm, TheJournal of Finance.2009, 64(1), P. 263–308.
[11]. Broumand, R., The Relationship Between Investment Opportunities and Dividend Policies, MS Thesis, Islamic Azad University, Neyshabour Branch. 2009.
[12]. Dellf, M.  Belgian Intragroup Relations and the Determinants of Corporate Liquid Reserves, European Financial Management, 2001, 7(3), P. 375–392.
[13].  Demiroglu, C. & James, C. The use of bank lines of credit in corporate liquidity management: A review of empirical evidence. Journal of Banking & Finance, 2011, 35(4), P. 775-782 .
[14]. Dittmar, A. & Mahrt-Smith, J. Corporate governance and the value of cash holdings. Journal of Financial Economics, 2007, 83(3), P. 599-634.
[15]. Eslami-Bidgoli, G.R.; Talangi, A. Contrasting the Returns and Risks of Alternative Opportunities in Investments in Iran. Journal of Financial Research, 2005, 4, P.13-14.
[16]. Faulkender, M., Wang, R. Corporate financial policy and the value of cash. Journal of Finance, 2006, 61 (4), 1957–1990.
[17]. Foley C, Hartzell J, Titman S, Twite G.  Why do firms hold somuch cash? A tax-based explanation. Journal of Financial Economics, 2007, 86 (3), P. 579–607.
[18]. Harford, J., S. Mansi and W. Maxwell, Corporate Governance and Firm Cash Holdings, Journal of Financial Economics, 2008, 87, P. 535-555.
[19]. Hope, F., Li, Q. & Wang, X. Financial Reporting Quality and Investment Efficiency of Private Firms in Emerging Markets.  The Accounting Review, 2011, 86(4), P. 1255-1288.
[20]. Karimi, F., Sadeghi, M.  Internal and External Financial Constraints and Its Relation to the Investment of Capital Assets in Listed Companies in Tehran Stock Exchange. Research Quarterly Financial Accounting,  2009, 1, P. 43-58.
[21]. KashaniPour, M., Rasekhi, S. Financial Constraints and Investment Sensitivity to Cash Flows in Tehran Stock Exchange. 2010.
[22]. Kevin, K. and Vicki, W. Earnings Quality and Future Capital Investment: Evidence from Discretionary Accruals . Haas  School of  Business    University of   California at  Berkeley , McDonough  School of  Business  Georgetown University, 2008.
[23]. Lambert, R., Leuz, CH. & Werrecchia,  R.E, Accounting Information, Disclosure, and the Cost of Capital,  Journal of Accounting Research. 2007, 45(2), P. 385-42.
[24]. ShafiZadeh, A. Research on the Relationship between Systematic Risk and Stock Returns in Tehran Stock Exchange, MS Thesis of accounting, Tehran University. 1996.
[25]. Nekrasov,A. and Sheroff, P.K.  Fundamentals-Based Risk Measurement in valuation, 2007.
[26]. Nekrasov, A., & Shroff, P. Fundamentals-based risk measurement in valuation. The Accounting Review, 2009, 84(6), P. 1983-2011.
[27]. Shyam-Sunder, L., Myers, S.C., Testing static trade-off against pecking order models of capital structure. Journal of Financial Economics, 1999, 5, P.219–244.
[28]. ZamanPour, A. The Relationship between Investment Opportunities and Financial Policies of the Companies Listed in Tehran Stock Exchange, MS Thesis, Azad University, Mashhad Branch, 2002, P.46-54.
[29]. ZamanPour, A. The Relationship between Investment Opportunities and Financial Policies of the Companies Listed in Tehran Stock Exchange, 2004.
[30]. Wu, Y. Momentum trading, mean reversal and overreaction in Chinese stock market, Review of Quantitative Finance and Accounting, 2011, 37(3), P. 301-323.