The Effect of financial distress on Speed of Adjustment of Cash Holdings With Emphasis on Growth Opportunity and Financial Constraints

The Speed of Adjustment of Cash Holding is not constant due to the optimal level of cash holding in companies and factors such as growth opportunity, financial constraint and financial distress can have an impact on achieving optimal cash holding level.The purpose of this study was to investigate the effect of financial distress on Speed of Adjustment of Cash Holding Emphasizing opportunity growth and financial constraints. For this purpose, the statistical sample of the research includes 118 firms from time period of 2013 to 2020 selected among the firms listed in Tehran Stock Exchange and tested the hypotheses using panel data and generalized method of moments. The results indicate that the Speed of Adjustment of Cash Holding in financial distress firms is higher than non- financial distress firms. Also, the effect of financial distress is higher on the Speed of Adjustment of Cash Holding in firms with high growth opportunities and firms with financial constraints than other firms.