Impact of Agency Costs on Investment-cash Flow Sensitivity

Firm’s cash flow as a cheap finance source, may affect the level of investment, and high investment-cash flow sensitivity may cause investment inefficiency. The agency theory implies that managers of the firms with excess cash flow may over-invest for the purpose of private benefits. Additionally, a...

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Autores principales:	Mehdi Arabsalehi, Sepideh Kazemi Noori
Formato:	article
Lenguaje:	FA
Publicado:	Shahid Bahonar University of Kerman 2014
Materias:	investment–cash flow sensitivity agency cost over/ under-investment Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/ce0839d09437431ca74eec557ecd1ce8
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id	oai:doaj.org-article:ce0839d09437431ca74eec557ecd1ce8
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spelling	oai:doaj.org-article:ce0839d09437431ca74eec557ecd1ce82021-11-04T19:47:05ZImpact of Agency Costs on Investment-cash Flow Sensitivity2008-89142476-292X10.22103/jak.2014.726https://doaj.org/article/ce0839d09437431ca74eec557ecd1ce82014-09-01T00:00:00Zhttps://jak.uk.ac.ir/article_726_8b6f004f7c34adb0cc2560bf24b7818b.pdfhttps://doaj.org/toc/2008-8914https://doaj.org/toc/2476-292XFirm’s cash flow as a cheap finance source, may affect the level of investment, and high investment-cash flow sensitivity may cause investment inefficiency. The agency theory implies that managers of the firms with excess cash flow may over-invest for the purpose of private benefits. Additionally, agency costs and conflicts between managers and shareholders may lead to over/under-investment. This study investigates the impact of agency costs on investment-cash flow sensitivity. The target sample includes 103 firms listed in the Tehran Stock Exchange (TSE) during 2007 to 2011. The research takes logistic regression model to investigate the impact of agency costs on investment-cash flow sensitivity. Results show that agency costs are not the only source of inefficient investment, but could be regarded as the origin of increasing investment-cash flow sensitivityMehdi ArabsalehiSepideh Kazemi NooriShahid Bahonar University of Kermanarticleinvestment–cash flow sensitivityagency costover/ under-investmentAccounting. BookkeepingHF5601-5689FAمجله دانش حسابداری, Vol 5, Iss 17, Pp 97-118 (2014)
institution	DOAJ
collection	DOAJ
language	FA
topic	investment–cash flow sensitivity agency cost over/ under-investment Accounting. Bookkeeping HF5601-5689
spellingShingle	investment–cash flow sensitivity agency cost over/ under-investment Accounting. Bookkeeping HF5601-5689 Mehdi Arabsalehi Sepideh Kazemi Noori Impact of Agency Costs on Investment-cash Flow Sensitivity
description	Firm’s cash flow as a cheap finance source, may affect the level of investment, and high investment-cash flow sensitivity may cause investment inefficiency. The agency theory implies that managers of the firms with excess cash flow may over-invest for the purpose of private benefits. Additionally, agency costs and conflicts between managers and shareholders may lead to over/under-investment. This study investigates the impact of agency costs on investment-cash flow sensitivity. The target sample includes 103 firms listed in the Tehran Stock Exchange (TSE) during 2007 to 2011. The research takes logistic regression model to investigate the impact of agency costs on investment-cash flow sensitivity. Results show that agency costs are not the only source of inefficient investment, but could be regarded as the origin of increasing investment-cash flow sensitivity
format	article
author	Mehdi Arabsalehi Sepideh Kazemi Noori
author_facet	Mehdi Arabsalehi Sepideh Kazemi Noori
author_sort	Mehdi Arabsalehi
title	Impact of Agency Costs on Investment-cash Flow Sensitivity
title_short	Impact of Agency Costs on Investment-cash Flow Sensitivity
title_full	Impact of Agency Costs on Investment-cash Flow Sensitivity
title_fullStr	Impact of Agency Costs on Investment-cash Flow Sensitivity
title_full_unstemmed	Impact of Agency Costs on Investment-cash Flow Sensitivity
title_sort	impact of agency costs on investment-cash flow sensitivity
publisher	Shahid Bahonar University of Kerman
publishDate	2014
url	https://doaj.org/article/ce0839d09437431ca74eec557ecd1ce8
work_keys_str_mv	AT mehdiarabsalehi impactofagencycostsoninvestmentcashflowsensitivity AT sepidehkazeminoori impactofagencycostsoninvestmentcashflowsensitivity
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Impact of Agency Costs on Investment-cash Flow Sensitivity

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