The Interactive Effect of Business Strategy on the Relationship Between Managerial Ability, Financial Constraints, Cash Holding Value, and Capital Structure Adjustment speed

The current research aims to investigate whether business strategy has an interactive effect on the relationship between managerial ability, financial constraints, the value of cash holding, and the speed of capital structure adjustment.

In line with the research's purpose, six hypotheses were formulated. To test these hypotheses, a sample of 105 companies was selected from those admitted to the Tehran Stock Exchange between the years 2019-2022, using a systematic elimination method. EViews software was utilized for data analysis, employing multivariate regression models and logistic models to test the hypotheses.

The results of the research indicate that managerial ability has a positive and significant impact on cash holding value, a negative and significant impact on financial constraints, and the speed of capital structure adjustment. Additionally, the findings suggest that business strategy influences the relationship between managerial ability, cash holding value, financial constraints, and the speed of capital structure adjustment.

According to the research findings, it is recommended to focus on enhancing management capabilities. Capable managers are more adept at identifying liquidity issues early on, thereby reducing the need for external financing costs. Additionally, the Securities and Exchange Organization is advised to prioritize understanding the business strategies of companies when overseeing them. Effective supervision should include thorough scrutiny of company reports, as business strategies significantly impact a company's cash reserves, ultimately shaping its future performance and returns.