Comparison the Effect of Competition Risk in Product Market on Relationship between Cash Holding Level in Firms with and without Constraints in Financing Based on KZ Index

Document Type : Original Article

Authors
Arameh Soleymankhan 1
Zahra Pourzamani 2
1 Master of Science of Accounting, Central Tehran Branch, Islamic Azad University, Tehran, Iran
2 Associate Professor, Central Tehran Branch, Islamic Azad University, Tehran, Iran (Corresponding Author)
Abstract
In the capital markets by investors to evaluate the various factors used to value firms, one of the factors to be considered as a measure of value creation in dynamic markets is competition risk in product market. Cash resources are regarded as a threat recognition channel of an economic unit considering competition risk in product market and constraint in financing in current competitive world. Accordingly, the present research is going to study the effect of competition risk in product market on cash holding level in firms having constraints in financing. In this research 117 companies enlisted in Tehran Stock Exchange have been investigated for the time period between 2011 and 2015. To test hypotheses were used statistical analysis with panel data method Using software tools, Eviews and linear regression model. Research findings showed that on the whole competition risk in product market has had a negative effect on holding level.
Keywords
Competition Risk
Product Market
Cash Holding Level
Financing Constraints
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