University of Isfahan Financial Accounting Research 2322-3405 9 3 2017 11 22 Investigating the relationship between Managerial Overconfidence with Cash Holding and Cash-Flow Sensitivity of Cash Investigating the relationship between Managerial Overconfidence with Cash Holding and Cash-Flow Sensitivity of Cash 17 32 22425 10.22108/far.2018.104875.1113 FA Mohammad Kashanipour Associate Professor of Accounting, University of Tehran, Tehran, Iran. Mansour Mohamadi Ph.D Student of Accounting, University of Tehran, Tehran, Iran. Journal Article 2017 08 08 The main purpose of this paper is to investigate the relationship between managerial overconfidence with firm cash holding and also examine the effect of managerial overconfidence on the changes in the level of cash holdings in response to corporates’ cash flows (cash-flow sensitivity of cash) using a sample of 127 (762 firm - year observations) firm listed on Tehran stock exchange between 2010 to 2015. The panel data was used to test the hypothesis.The findings of this research indicates a positive significant relationship between the managerial overconfidence with cash holding. Also findings show that managerial overconfidence have significant positive effect on cash-flow sensitivity of cash. In other words, overconfidence manager save more cash out of their current cash flow. These findings in accordance with the idea that overconfidence managers views future external financing as excessively costly and try to hold more cash for financing investment projects. The main purpose of this paper is to investigate the relationship between managerial overconfidence with firm cash holding and also examine the effect of managerial overconfidence on the changes in the level of cash holdings in response to corporates’ cash flows (cash-flow sensitivity of cash) using a sample of 127 (762 firm - year observations) firm listed on Tehran stock exchange between 2010 to 2015. The panel data was used to test the hypothesis.The findings of this research indicates a positive significant relationship between the managerial overconfidence with cash holding. Also findings show that managerial overconfidence have significant positive effect on cash-flow sensitivity of cash. In other words, overconfidence manager save more cash out of their current cash flow. These findings in accordance with the idea that overconfidence managers views future external financing as excessively costly and try to hold more cash for financing investment projects. https://far.ui.ac.ir/article_22425_57b9032f82ac05e6aa35cebde55274bb.pdf