Corporate governance and cash holdings in MENA: Evidence from internal and external governance practices

Al‐Najjar, Basil; Clark, Ephraim

doi:10.1016/j.ribaf.2016.07.030

Cited by 119 publications

(118 citation statements)

References 43 publications

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“…3The tax motive which means cash balances will be higher if there are tax consequences related to repatriating foreign earnings (Foley et al, 2007). (4) Agency motive confirms entrenched managers have incentives to hold high level of cash by controlling dividend payments which increases agency problem, since they do not use cash balances to optimize shareholders' wealth (Jensen andWalking, 2010 , andAl-Najjar andClark, 2017).…”

Section: Introductionmentioning

confidence: 99%

The Moderating Effect of Firm Characteristics on the Association Between Accounting Conservatism and Cash Holdings

Soliman

2019

ijafr

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Recent studies are interested in the determinants of cash holdings (CASH), some of these studies focus on conservatism, as one of these determinants. In light of a debate on the nature of the association between conservatism and CASH, this paper discusses and investigates the answers for three questions, the first question about the direct association between conservatism and CASH, the second question about the moderating effect of firm characteristics on this association, the third question about the effect of adopting Egyptian Accounting Standards (EAS) since 2016 on the last association. This paper focuses on Egyptian listed firms in Egyptian Stock Exchange (EGX), especially EGX 100, for six years period from 2013 to 2018 for 11 main sectors, 125 firms and 703 unbalances panel data observations. The findings indicate that (1) conservatism has a negative effect on CASH, (2) only firm size has a moderating and positive effect on the association between conservatism and CASH, (3) firm leverage, firm growth opportunity, and firm managerial ownership do not have a moderating effect on the last association. (4) Adopting EAS in 2016 by Egyptian listed firms gives the management of these firms' suitable chances to control CASH using its association with conservatism.

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Section: Introductionmentioning

confidence: 99%

The Moderating Effect of Firm Characteristics on the Association Between Accounting Conservatism and Cash Holdings

Soliman

2019

ijafr

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“…The non-significant coefficient of LEVE x SIZE indicates that there is no relationship between leverage and cash rate is not moderated by SIZE of international firm. this reject the study of Al-najjar and Clark (2017).…”

Section: Discussionmentioning

confidence: 81%

“…The independent variable for the study were leverage (LEVE) which is measured by total liabilities divided by total assets, income level (INCM) is measured as total revenue divided by total assets, debt ratio (DEBTR) is measured as total debts (short and long) divided by total assets consistent with Baños-Caballero, Garcí a-Teruel and Martí nez-Solano (2014), Sivathaasan et al (2016), Al-najjar and Clark (2017). Internationalization which is a dummy variable is measured as '1' for firms involve in international activities like export and import of product, '0' for otherwise consistent with the study of Angulo-ruiz et al (2018), dividend payout (DIVPO) was measured as '1' for firms which have paid dividend within the study period '0' for otherwise following the research of Gill and Biger (2013).…”

Section: Independent Variablementioning

confidence: 99%

The Interaction of Financial Leverage and Firm's Operational Efficiency

Coleman

Baidoo

2020

BER

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The study examines the effect of financial leverage on operational efficiency. This study used a panel data of 102 non-financial companies listed on Nigeria and Ghana stock exchange for the period 2012 – 2016. It was revealed that there is an S-curve relationship between financial leverage and working capital management and cash holding. Also there is a significant moderating effect on the relationship between internationalization and dividend payout. This implies that firms that are involved in international activities are highly concerned with having borrowing as part of their capital structure than solely operating with owners’ capital which might be the case of most domestic firms. Relationship between financial leverage and working capital management and cash holding is considered to be non-monotonic which gives management insight of choosing the right leverage management policy to achieve desired goal.

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“…Ozkan and Ozkan (2004) have argued that managerial ownership is in non-linear relationship with cash holdings. In literature, the nonlinear relationship between entrenchment to alignment effect ((Najjar & Clark, 2017;Basheer et al, 2014;Kusnadi, 2011. These scholars have claimed that with the increasing ownership the alignment will increase, after certain level it will decrease i.e entrench and final again aligned.…”

Section: Mo and Corporate Financial And Cash Holding Decisionsmentioning

confidence: 99%

The Simultaneity of Corporate Financial Decisions Under Different Levels of Managerial Ownership: A Case of Pakistani Listed Firms

Hidthiir¹,

Basheer²,

Hassan³

2019

RWE

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Purpose-The prime objective of the current study is to investigate the interdepended of financial decision. In addition to that the impact of different level of managerial ownership on the interdepended of financial decisions is also examined agency theory, pecking order theory and the signaling theory are used as the theoretical lenses to draw the theocratical framework.Design/methodology/approach-The balance panel of 161 nonfinancial firm over the period of five years from 2013 to 2017 is used to achieve the research objectives. Polled OLS, Fixed effect and Random effect estimates are employed to answer the reach questions Findings-The managerial ownership with an average mean ownership of 39 is appeared at the top. Interestingly more than 75 percent firms are being controlled by mangers and in more than 60 percent firms of our sample the controlling managers hold more than 40 percent of shares. The Wu Hausman test is performed to determine the existence of the endogeneity problem. The results indicates that the financial decisions namely cash holding decisions, financing decisions and investment decisions has significant impact on each other. Where the managerial ownership is in nonlinear relationship with financial decisions. The results of the study are also providing support to agency theory, pecking order theory and the signaling theory Research implications-The study will be helpful for policymakers, researchers, corporate personals and financial institutions in understanding the interrelationship between financing decisions and the role of managerial ownership in there interdepended.Originality/value-The study is among the pioneering studies on the issue and will provide policy guideline on the said issues

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Corporate governance and cash holdings in MENA: Evidence from internal and external governance practices

Cited by 119 publications

References 43 publications

The Moderating Effect of Firm Characteristics on the Association Between Accounting Conservatism and Cash Holdings

The Moderating Effect of Firm Characteristics on the Association Between Accounting Conservatism and Cash Holdings

The Interaction of Financial Leverage and Firm's Operational Efficiency

The Simultaneity of Corporate Financial Decisions Under Different Levels of Managerial Ownership: A Case of Pakistani Listed Firms

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