The Investigation of membership effect in business group on the Investment–cash flow sensitivity

Subject Areas : Financial Knowledge of Securities Analysis

امید پورحیدری ¹ , علی قاسمی اقباش ²

1 - نویسنده مسئول
2 - ندارد

Received: 2014-03-11 Accepted : 2014-05-22 Published : 2014-10-12

Keywords: Investment–cash flow sensitivi, business group,

Abstract :

The main objective of this study investigation the effect of membership in businessgroup on the Investment–cash flow sensitivity. When the external financial resource isscare, the companies use cash flow operation for investing. In Result the investingsensitive to cash flow. If a company membership in business group, it can provide theresources for investing from group and in result the sensitivity of investment to cash flowis reduce. The study sample consists of 120 Firms listed in Tehran stock Exchange duringthe 2002 to 2011. The multivariate regression is used to analyze the study Hypotheses.The results indicate there is not a significant relationship between cash flow andinvestment on member firms in business group. Also the results show that there isn’tsignificant relationship between cash flow and investment on member firms of diversityand non diversity business group in result the Hypotheses is rejected. It shows thatIranian company don’t use from capacities in business group.