Abstract

The present study aims at investigating the effect of economic value added policy enforcement on overinvestment and underinvestment and, eventually, on the cash holding value. To do so, utilizing the model proposed by Pinkowitz and Williamson, a total of 127 companies were examined for a time span between 2006 and 2013. The present study is an applied research in terms of the study objectives that has been carried out based on a descriptive-correlation method. Eviews was the software applied to analyze the study data. The results indicated that the overinvestment and underinvestment ventures in the securities exchange market decrease with the enforcement of economic value added policies performance evaluation and, on the other hand, the company’s value of cash holding increases with the implementation of economic value added policy