IDEAS home Printed from https://ideas.repec.org/a/arp/tjssrr/2018p294-302.html
   My bibliography  Save this article

The Relationship Between Social Responsibility and Investment-Cash Flow ?Sensitivity ? and the Role of Agency Costs

Author

Listed:
  • Abdolhossein Talebi Najafabadi*

    (Assistant Prof, Accounting, Faculty of Humanity sciences, University of bojnord, bojnord, Iran)

  • Zahra Farhadi

    (Assistant Prof, Accounting, Faculty of Humanity sciences, University of bojnord, bojnord, Iran)

  • Narjes Kamali Kermani

    (Narjes Kamali Kermani)

Abstract

In this study, the relationship between social responsibility and investment-cash flow ?sensitivity ?and the role of agency costs in companies listed on Tehran Stock Exchange were investigated. To this end, 127 companies were examined during the period 2011-2016. The required data in this research was extracted, classified and calculated using Excel software and finally, the hypotheses were tested at a 95% confidence level through Eviews? ?and Stata software. The results obtained from hypothesis testing demonstrated that corporate social responsibility ?negatively moderates investment-cash flow ?sensitivity. Furthermore, no reliable evidence was found in relation to the effectiveness of agency costs in the relationship between social responsibility and investment-cash flow ?sensitivity at a 95% confidence level.

Suggested Citation

  • Abdolhossein Talebi Najafabadi* & Zahra Farhadi & Narjes Kamali Kermani, 2018. "The Relationship Between Social Responsibility and Investment-Cash Flow ?Sensitivity ? and the Role of Agency Costs," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 4(11), pages 294-302, 11-2018.
    • Handle: RePEc:arp:tjssrr:2018:p:294-302
    as

    Download full text from publisher

    File URL: https://www.arpgweb.com/pdf-files/jssr4(11)294-302.pdf
    Download Restriction: no
    File URL: https://www.arpgweb.com/journal/7/archive/11-2018/11/4
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hovakimian, Armen & Opler, Tim & Titman, Sheridan, 2001. "The Debt-Equity Choice," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 36(1), pages 1-24, March.
    2. Bert D'Espallier & Alessandra Guariglia, 2015. "Does the investment opportunities bias affect the investment-cash flow sensitivities of unlisted SMEs?," The European Journal of Finance, Taylor & Francis Journals, vol. 21(1), pages 1-25, January.
    3. Robert E. Carpenter & Bruce C. Petersen, 2002. "Is The Growth Of Small Firms Constrained By Internal Finance?," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 298-309, May.
    4. Bao, Dichu & Chan, Kam C. & Zhang, Weining, 2012. "Asymmetric cash flow sensitivity of cash holdings," Journal of Corporate Finance, Elsevier, vol. 18(4), pages 690-700.
    5. Steven M. Fazzari & R. Glenn Hubbard & Bruce C. Petersen, 1988. "Financing Constraints and Corporate Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(1), pages 141-206.
    6. Chen, Alex A. & Cao, Hong & Zhang, Dayong & Dickinson, David G., 2013. "The impact of shareholding structure on firm investment: Evidence from Chinese listed companies," Pacific-Basin Finance Journal, Elsevier, vol. 25(C), pages 85-100.
    7. Tae-Nyun Kim, 2014. "The impact of cash holdings and external financing on investment-cash flow sensitivity," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 13(3), pages 251-273, August.
    8. George, Rejie & Kabir, Rezaul & Qian, Jing, 2011. "Investment-cash flow sensitivity and financing constraints: New evidence from Indian business group firms," Journal of Multinational Financial Management, Elsevier, vol. 21(2), pages 69-88, April.
    9. Almeida, Heitor & Campello, Murillo, 2010. "Financing Frictions and the Substitution between Internal and External Funds," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 45(3), pages 589-622, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ilker Yilmaz, 2022. "Leverage and Investment Cash Flow Sensitivity: Evidence from Muscat Securities Market in Oman," SAGE Open, , vol. 12(3), pages 21582440221, August.
    2. Abdul Rashid & Noshaba Jabeen, 2018. "Financial frictions and the cash flow – external financing sensitivity: evidence from a panel of Pakistani firms," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 4(1), pages 1-20, December.
    3. Lozano, M. Belén & Yaman, Serhat, 2020. "The determinants of cash flow sensitivity of cash: The family ownership effect," Research in International Business and Finance, Elsevier, vol. 53(C).
    4. Bahadır Ergün & Ömer Tuğsal Doruk, 2020. "Effect of financial constraints on the growth of family and nonfamily firms in Turkey," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-24, December.
    5. Bertoni, Fabio & Croce, Annalisa & Guerini, Massimiliano, 2015. "Venture capital and the investment curve of young high-tech companies," Journal of Corporate Finance, Elsevier, vol. 35(C), pages 159-176.
    6. Milos Markovic & Michael A. Stemmer, 2017. "Firm Growth Dynamics and Financial Constraints: Evidence from Serbian Firms," Documents de travail du Centre d'Economie de la Sorbonne 17012, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    7. Park, Jin, 2019. "Financial constraints and the cash flow sensitivities of external financing: Evidence from Korea," Research in International Business and Finance, Elsevier, vol. 49(C), pages 241-250.
    8. Schauer, Catharina & Elsas, Ralf & Breitkopf, Nikolas, 2019. "A new measure of financial constraints applicable to private and public firms," Journal of Banking & Finance, Elsevier, vol. 101(C), pages 270-295.
    9. Driver, Ciaran & Muñoz-Bugarin, Jair, 2019. "Financial constraints on investment: Effects of firm size and the financial crisis," Research in International Business and Finance, Elsevier, vol. 47(C), pages 441-457.
    10. Chada, Swechha & Saravanan, Palanisamy & Varadharajan, Gopal, 2024. "Socioemotional wealth and cash flow sensitivity of cash: Evidence from India," The North American Journal of Economics and Finance, Elsevier, vol. 69(PA).
    11. Campello, Murillo & Graham, John R., 2013. "Do stock prices influence corporate decisions? Evidence from the technology bubble," Journal of Financial Economics, Elsevier, vol. 107(1), pages 89-110.
    12. Fernández de Guevara, Juan & Maudos, Joaquín & Salvador, Carlos, 2021. "Effects of the degree of financial constraint and excessive indebtedness on firms’ investment decisions," Journal of International Money and Finance, Elsevier, vol. 110(C).
    13. Francesco Quatraro & Marco Vivarelli, 2015. "Drivers of Entrepreneurship and Post-entry Performance of Newborn Firms in Developing Countries," The World Bank Research Observer, World Bank, vol. 30(2), pages 277-305.
    14. Didier, Tatiana & Levine, Ross & Llovet Montanes, Ruth & Schmukler, Sergio L., 2021. "Capital market financing and firm growth," Journal of International Money and Finance, Elsevier, vol. 118(C).
    15. Caggese, Andrea, 2007. "Testing financing constraints on firm investment using variable capital," Journal of Financial Economics, Elsevier, vol. 86(3), pages 683-723, December.
    16. Gül, Selçuk & Taştan, Hüseyin, 2020. "The impact of monetary policy stance, financial conditions, and the GFC on investment-cash flow sensitivity," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 692-707.
    17. Poncet, Sandra & Steingress, Walter & Vandenbussche, Hylke, 2010. "Financial constraints in China: Firm-level evidence," China Economic Review, Elsevier, vol. 21(3), pages 411-422, September.
    18. Quader, Syed Manzur, 2017. "Differential effect of liquidity constraints on firm growth," Review of Financial Economics, Elsevier, vol. 32(C), pages 20-29.
    19. Fabio Bertoni & María Ferrer & José Martí, 2013. "The different roles played by venture capital and private equity investors on the investment activity of their portfolio firms," Small Business Economics, Springer, vol. 40(3), pages 607-633, April.
    20. Imen Derouiche & Majdi Hassan & Sarra Amdouni, 2018. "Ownership structure and investment-cash flow sensitivity," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 22(1), pages 31-54, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arp:tjssrr:2018:p:294-302. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Managing Editor (email available below). General contact details of provider: http://arpgweb.com/?ic=journal&journal=7&info=aims .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.