EFFECT OF CASH FLOWS VOLATILITIES ON CURRENT INVESTMENTS IN COMPANIES LISTED ON THE TEHRAN STOCK EXCHANGE

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Abstract

The aim of the present study is to description the role of cash flows volatilities on the extent and level of current investments in companies. Research sample includes companies listed on the Tehran Stock Exchange during 2004-2014. Data have been extracted from financial statements of companies with the use of multiple linear regression and have been studied in the form of panel data. Results obtained from research hypotheses test indicate that cash flows volatilities have a positive and significant relationship with current investments in companies. Also, this relationship has been tested in two groups of companies with positive growth of cash flows and companies with negative growth of cash flows. Findings indicate that in each of these groups also there is a significant relationship between cash flows vitalities and current investments of the companies, while, the size of this relationship is larger in companies with a positive growth.

Keywords: Cash Flows, Investment, Capital Sensitivity, Positive and Negative Cash Flows

Received: 12.02.2017

Accepted: 18.10.2017

How to cite this paper: Rezaei Ranjbar, H. (2017). Effect of cash flows volatilities on current investments in companies listed on the Tehran stock exchange. Corporate Ownership & Control, 15(1-2), 341-346. https://doi.org/10.22495/cocv15i1c2p3