International Academic Journal of Economics

Examine the relationship between extra cash and credit restrictions abnormal returns of companies under the terms of the economic crisis

Monireh Faramarzi and Hajar Amini

Abstract: The present study aimed to examine the relationship between the extra cash and credit restrictions abnormal returns the shares of companies under the terms of the economic crisis companies listed in the securities market is in Tehran. The number of the companies, 116 statistics sample survey period and companies, including 6 years since 2008 to 2013. The findings indicate that between additional cash with abnormal returns, and significant relationship, which reflects the adverse reaction to the capital market extra cash. While the capital market, extra cash companies during the period of the economic crisis , favourable response. Also, in accordance with the results obtained companies that higher extra cash, with more credit limit. Finally based on the findings of the first test Hypothesis - based research that between extra cash with abnormal returns companies to reverse and significant ; there is a for - profit units managers recommended that the policies of the maintenance cash reserves to factors and specific characteristics under their management unit.

Keywords: extra cash, abnormal returns, credit limit, the economic crisis

Page: 24-33

Volume 1, Issue 1, 2014