The Effect of Capital Market Investors' Emotional Tendencies on the Value of Companies' Cash Holdings

Objectives: This study aims to investigate the effect of the emotional tendencies of capital market investors on the value of holding cash in firms. It focuses on understanding how investor behavior influences corporate liquidity decisions in the Tehran Stock Exchange. Methodology/Design/Approach: The research is applied, descriptive in nature, and causal in terms of methodology. The study covers firms listed on the Tehran Stock Exchange during the period 2020–2024. Using the systematic elimination method, 104 companies were selected as the statistical sample. Data were collected through library methods. Descriptive and inferential statistics were employed to summarize the data, and multivariate regression analysis using Ives software was applied to test the research hypotheses. Findings: The results indicate that the emotional tendencies of capital market investors significantly affect the value of holding cash in firms. Innovation: This study contributes to the literature by linking behavioral finance insights to corporate cash management practices, highlighting the influence of investor sentiment on liquidity decisions. It offers practical implications for managers and policymakers aiming to optimize cash holdings in response to market sentiment.