Corporate Cash Holdings and Adjustment Behaviour in Chinese Firms: An empirical Analysis Using Generalized Method of Moments

Rehman, Ajid Ur; Wang, Man

doi:10.14453/aabfj.v9i4.3

Cited by 22 publications

(34 citation statements)

References 44 publications

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“…4. To cope with these issues, this study uses two-step generalized method of moments (GMM) following Rehman and Wang (2015). The study uses GMM's method of Arellano and Bover (1995) /Blundell and Bond (2000) to estimate Eq.…”

Section: Data and Data Sourcesmentioning

confidence: 99%

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How do Chinese firms adjust their financial leverage: an empirical investigation using multiple GMM models

Rehman

Wang

Mirza

2017

China Financ. and Econ. Rev.

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Background: Given the unique market setting and institutional environment of China, this study tries to investigate targeting behavior of Chinese firms towards leverage and the determinants of leverage policy in China at various levels. Methods: For this purpose, we used an extensive set of data of 760 firms over a period from 2001 to 2013. To investigate the adjustment behavior towards target leverage policy, this study uses the GMM (generalized method of moments) models of Arellano and Bover (J Econ 68:29-51, 1995)/Blundell and Bond (Econ Rev 19:321-340, 2000) to estimate the adjustment behavior and adjustment speed towards a target level of leverage. The study finds that Chinese firms have a target level of leverage and firms tries to adjust to their target.

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Section: Data and Data Sourcesmentioning

confidence: 99%

“…1, the study uses OLS technique and fixed-effects models with an added AR term to account for serial correlation. These estimation methods were more recently used in research studies of Getzmann et al (2014) and Rehman and Wang (2015). Table 1 shows descriptive statistics of the sample.…”

Section: Data and Data Sourcesmentioning

confidence: 99%

How do Chinese firms adjust their financial leverage: an empirical investigation using multiple GMM models

Rehman

Wang

Mirza

2017

China Financ. and Econ. Rev.

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“…They found their results consistent with the view that the market believes controlling shareholders are more likely to extract the private benefits associated with cash reserves. Rehman and Wang (2015) analyzed the data of Chinese listed firms during 2001-2013 to understand the adjustment of speed of corporate cash holdings and to explore the factors that affect the corporate cash holdings. Their results indicate a lower adjustment coefficients for Chinese listed firms compared to firms in developed countries.…”

Section: Literature Reviewmentioning

confidence: 99%

Effects of Excess Cash, Board Attributes and Insider Ownership on Firm Value: Evidence from Pakistan

Sheikh¹,

Khan²

2016

AABFJ

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The purpose of this paper is to investigate whether excess cash, board attributes (i.e. board size, board independence and CEO duality) and insider ownership affects the value of the firm. Data were taken from annual reports of non-financial firms listed on the Karachi Stock Exchange (KSE) Pakistan during 2008-2012. Pooled ordinary least squares method used to estimate the effects of excess cash and internal governance indicators on the value of the firm. Our results indicate that excess cash is significantly negatively related to firm value. Excess cash along with board size is significant and negatively related to firm value. Excess cash along with insider ownership is significant and negatively related to firm value. Control variables namely leverage and dividends are positively while firm size is negatively related to firm value in all regressions. In sum, empirical results indicate that excess cash, board size and insider ownership have material effects on the value of the firm. Moreover, findings of this study provide support to managers to understand the impact of excess cash and internal governance measures on firm value. In addition, findings provide support to regulatory authorities to frame regulations that improve the level of corporate governance in the country. AbstractThe purpose of this paper is to investigate whether excess cash, board attributes (i.e. board size, board independence and CEO duality) and insider ownership affects the value of the firm. Data were taken from annual reports of non-financial firms listed on the Karachi Stock Exchange (KSE) Pakistan during 2008-2012. Pooled ordinary least squares method used to estimate the effects of excess cash and internal governance indicators on the value of the firm. Our results indicate that excess cash is significantly negatively related to firm value. Excess cash along with board size is significant and negatively related to firm value. Excess cash along with insider ownership is significant and negatively related to firm value. Control variables namely leverage and dividends are positively while firm size is negatively related to firm value in all regressions. In sum, empirical results indicate that excess cash, board size and insider ownership have material effects on the value of the firm. Moreover, findings of this study provide support to managers to understand the impact of excess cash and internal governance measures on firm value. In addition, findings provide support to regulatory authorities to frame regulations that improve the level of corporate governance in the country. JEL Classification: G32

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“…Board independence is an independent board of commissioners who do not have corporate management, share ownership or the influence of family relations with other board members. Independent commissioners have a responsibility to help improve transparency and transparency of information [8] .Research conducted by [9] shows board independence results have a negative relationship and a significant effect on cash holding. Research conducted by [10] shows that board independence has no influence on cash holding.…”

Section: The Speculative Motivementioning

confidence: 99%

The Effect Of Dividend, Board Characteristics, Information Asymmetry Towards Cash Holding On Manufacturing Company

Bangun¹,

Yuniarwati²,

Saputra³

2019

Proceedings of the the First International Conference on Islamic Development Studies 2019, ICIDS 2019, 10 September 2019, Banda

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The purpose of this research is to analyze the dividend payment, board characteristics and information asymmetry to cash holding. The sample of this study was selected using purposive sampling that amounted 48 company in Indonesian Stock Exchange within the year 2015-2017. Data processing techniques using multiple regression analysis that helped by SPPSS program for windows the 24 th version and Microsoft Excel 2013. The results of this study indicate that dividend payment have a positive significant influence to cash holding, board characteristics (board size and independence) does not have an influence to cash holding and information asymmetryhave a positive non-significant influence to cash holding.

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Corporate Cash Holdings and Adjustment Behaviour in Chinese Firms: An empirical Analysis Using Generalized Method of Moments

Cited by 22 publications

References 44 publications

How do Chinese firms adjust their financial leverage: an empirical investigation using multiple GMM models

How do Chinese firms adjust their financial leverage: an empirical investigation using multiple GMM models

Effects of Excess Cash, Board Attributes and Insider Ownership on Firm Value: Evidence from Pakistan

The Effect Of Dividend, Board Characteristics, Information Asymmetry Towards Cash Holding On Manufacturing Company

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