Effect of Business Groups Affiliation on Cash Holdings and Return on Equity

Nowadays, business groups play an outstanding role in financial markets. Corporates in the trading groups are able to use technology, capital, human resources, productions and services of other members in the group in addition to their own resources and capabilities. Thus, this paper studies the effect of business group affiliation on cash holdings and return on equity. The sample involves ۹۴ corporates among those accepted in Tehran Stock Exchange. In this research, the effect of business group affiliation on cash holdings and return on equity during ۲۰۱۰-۲۰۱۵ has been investigated; in total, it includes ۵۶۴ observations for the research. Statistical method applied here is the multivariate regression in the data panel way. Results achieved by the research hypotheses indicate that there is a significant relationship between business group affiliation, cash holdings and return on equity.

Keywords:

Business group affiliation , Corporate cash holdings , Returns on equity