The Impact of Block Ownership on Cash Holdings in Companies Listed on the Tehran Stock Exchange

Abstract

This study aims to investigate the impact of block ownership on cash holding in companies listed on the Tehran Stock Exchange (TSE). To achieve this objective, the effect of block ownership (BOWN), institutional block ownership (IBOWN) and strategic block ownership (SBOWN) on cash holding (CASH) of companies was examined in three separate models. Additionally, the effects of financial and market variables such as institutional ownership (IOWN), firm size (SIZE), market-to-book ratio (MB), net working capital (NWC), operating cash flows (OCF), standard deviation of operating cash flows (OCFV), dividend payout (DIV), research and development expenses (RD), capital expenditures (CAPEX) and asset acquisition (ACQ) were controlled for in regression models. Overall, this study is positioned as applied in terms of objective and descriptive-post-event in terms of data collection method. The statistical population of this study includes all active companies on the TSE over a seven-year period from 2016 to 2022. A systematic elimination sampling method (screening method) was used to select a sample of 157 companies, totaling 1099 firm-years as the selected sample and examined using a multivariate linear regression model and Eviews8 software (panel data method - fixed effects). The results of this study indicate that BOWN and SBOWN influence CASH of companies, but the effect of IBOWN on CASH of companies was not confirmed.