Document Type : Original Article
Authors
1 Assistant Prof. of Accounting, Department of Management, Economics and Accounting, Payame Noor University, Tehran, Iran
2 M.Sc. in Accounting, Imam Reza International University, Mashhad, Iran; ghazvini.m@gmail.com.
Abstract
One of the topics that has been well discussed in the theoretical foundations of financial economics is the sensitivity of investment costs to cash flow. The degree of reliance of a company on internal resources is determined through the sensitivity of investment to the cash flow of that company. In this regard, the present study examines the moderating role of agency costs on the relationship between CEO characteristics (including CEO optimism, ability, influence, and experience) and investment sensitivity to companies' cash flows. For this purpose, 136 production companies were selected from Tehran Stock Exchange through screening technique during 11 years (1390-1400). This research is a library and analytical-causal study and is based on panel data analysis; Also, factor analysis has been used to index CEO characteristics. The results showed that the CEO's optimism, ability, influence and experience have a significant effect on the sensitivities of companies' investment cash flows. In addition, the results showed that agency costs have a significant effect on the relationship between optimism, experience, ability and influence of the CEO and the sensitivities of cash flows of companies' investments.
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