A survey of the relationship between managerial optimism, financial constraints and Investment-cash flow sensitivity

Normally, any business unit needs working capital to continue its activity. To develop activities and increase profitability, any business unit is obliged to make new investment. Both requirements of business unit, the need to working capital and new investment are provided via funding. Thus, funding for a long-term investment is a major concern of managers of companies. This study is aimed to evaluate the relationship between managerial optimism (in earnings per share forecast), financial constraint and Investment-cash flow sensitivity. To do this, the data of all companies listed on Tehran Stock Exchange (TSE) during 9002 to 9002 are extracted and regression model of pooled data is used for hypotheses test. Finally, the relationship between financial constraint in managerial optimism in earnings per share forecast and investment-cash flow sensitivity was supported. However, there was no significant relationship between financial constrain, investment and operating cash flow.

کلیدواژه ها:

Managerial optimism ، Financial constraint ، Investment-cash flow sensitivity