The Effect of Internal Mechanisms of Corporate Governance on the Level of Cash holdings in Tehran Stock Exchange

Corporate governance tools are effective factors in determining the level of cash holdings. Some researches indicate that increasing in corporate governance quality leads to decrease cash holdings. No many researches have done about the relationship between corporate governance and cash holdings in Iran. Therefore the main goal of this paper is to review the relationship between percentage of institutional ownership and percentage of outside directors as independent variables and cash holdings as dependent variable in Tehran Stock Exchange. Therefore 129 firms that their required data for a ten year period was available were studied. The multivariate pooled regression model is used to examine the hypotheses. The conclusions indicate that there is no significant relationship between percentage of institutional ownership and cash holdings. There is a negative and significant relationship between percentage of outside directors and cash holdings in Tehran Stock Exchange.