The impact of ownership structure on the relationship between free cash flows and efficient utilization of assets in companies listed in Tehran Stock Exchange

چکیده مقاله

This study reviews various forms of ownership structure including managerial ownership, institutional ownership, governmental ownership and concentrated ownership and how they affect the relationship between free cash flows and efficient utilization of assets. For this purpose, the data related to one hundred companies listed in Tehran Stock Exchange were collected for the period of1388 to 1392 and regression model of combined data was used to test hypotheses. The results show that there is a positive significant relationship between concentration of ownership and efficient utilization of assets, but the relationship between managerial ownership, governmental ownership and efficient utilization of assets did not verify. The results also suggest that increasing the managerial ownership and governmental ownership causes the relationship between free cash flows and efficient utilization of assets to be more negative and significant. Managers tend to invest free cash flows in projects with personal benefits; they don’t follow the foreseen procedures and even ignore negative net present value of the project. Totally, some investment activities may have a positive outcome, but this outcome is less than the cost of capital.

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