TITLE:
The Effect of Financial Flexibility on Financial Behavior of Companies Listed in Tehran Stock Exchange
AUTHORS:
Tahereh Alsadat Mirkhalili, Hamid Khajeh Mahmoudabadi
KEYWORDS:
Financial Flexibility, Company Value, Investment Activity, Amount of Cash Holding, Dividend
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.8 No.1,
January
22,
2018
ABSTRACT: The
flexibility plays an important role in making the managers powerful in the
regard of investment in the future. The problems of the capital market have necessitated
the maintenance of flexibility for the companies for the purpose of using profitable
opportunities. The present research has aimed to study the effect of financial
flexibility on the financial behavior. The statistic sample used in the present
study consists of 100 companies accepted in Tehran stock exchange during the
years 2009 to 2015. The financial flexibility and financial behavior are
respectively the independent and dependent variables which were measured by the
investment activity, dividend payout ratio, amount of cash holding and company
value. The data analysis was done by the use of the multi-variable regression
models based on the panel data techniques and the use of Eviews econometrics
software. The results concluded from the study of effect of the financial
flexibility on the financial behavior corresponding to the theoretical
foundations which had
meaningful and positive effects. Therefore, the hypothesis that the financial
flexibility has positive and meaningful effects on the
investment activity of the companies accepted in the stock exchange was
confirmed. The other results of paper were that
the financial flexibility had negative and
meaningful effects on the dividend payout ratio. So, the hypothesis that the financial
flexibility has negative and meaningful effects on the dividend payout ratio
of the companies accepted in the stock exchange was not confirmed. The
hypothesis that the financial flexibility has positive and meaningful effects on the amount of cash holding
of the companies accepted in the stock exchange was not confirmed, because the
effect of the flexibility on the amount of cash holding was not meaningful.
Also, the hypothesis that the financial flexibility has positive and meaningful
effects on the value of companies accepted in the stock exchange was confirmed.