M.A. Thesis:

Financial Constraints r and d investment . and the value of cash holdings

In recent decades, R & D investment has increased significantly and is increasingly seen as an important knowledge-based economy. The value of cash assets may also be affected by both the financial constraints and the nature of the investment. The key factor introduced in this study is the importance of a firm’s investment characteristics. In particular, the paper explores the importance of R & D investment to determine whether the overall relationship between financial constraints and cash value is contingent on the nature of the investment. The main objective of this research is to investigate financial constraints, investment in research and development, and the value of cash holdings based on evidence of capital market. The present study was conducted using an applied and descriptive-correlational post-event method using a sample of 183 firms listed in Tehran Stock Exchange. The hypothesis testing, however, was performed using multiple regressions based on the collected data during the years 2010-2016 by using the statistical software R. At the expected error level (%5), the results indicated that among firms with R&D expenditures, cash is more valuable for firms with financial constraints than firms with no financial constraints. There is also a weak correlation between the value of cash holdings and financial constraints among firms without R & D expenditure

Keywords: Financial constraints, R&D Investment, the value of cash holdings