Directors’ education and corporate liquidity: evidence from boards in Taiwan

Wang, Ma-Ju; Su, Xuan‐Qi; Wang, Hong-Da; Chen, Yan-Shing

doi:10.1007/s11156-016-0597-6

Cited by 28 publications

(28 citation statements)

References 65 publications

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“…Empirical evidence on educational qualification of directors have had little (Darmadi, 2013) or no effect (Bhagat et al, 2010) on long-term company performance, while others have found a positive impact on company performance (Haniffa and Cooke, 2002;Ujunwa, 2012;Reeb and Zhao, 2013). Wang et al (2017) provide evidence that companies with highly educated directors on the board, tend to hold more cash and are associated with higher value of cash, most especially in financially constrained companies. This implies that a highly educated board provides better monitoring and advising functions and thus complements corporate governance.…”

Section: Academic Directors As a Signalling Mechanismmentioning

confidence: 87%

“…Similarly, in line with the legitimacy role of the board, higher educational qualification of directors is recognised as a signal of a company's legitimacy by improving board prestige (Certo, 2003;D'Aveni, 1990). In fact, when accessing external funds, legitimate companies may experience lower cost of capital (Wang et al, 2017). Francis et al (2015) provide that academic directors have some unique characteristics (e.g., expertise, social connection, network and reputation), which can serve as a signal of board quality.…”

Section: Variablesmentioning

confidence: 99%

“…One important way to identify a board with strong corporate governance quality is the educational background of directors (Anderson et al, 2011). The educational background of directors can make an important difference in such directors' abilities to contribute to strategic decision-making (Carpenter and Westphal, 2001) and signal a company's legitimacy by improving the board's prestige (Certo, 2003;D'Aveni, 1990;Reeb and Zhao, 2013;Wang et al, 2017). A director's education signals his/her intellect and ability to better handle challenges (Bhagat et al, 2010).…”

Section: Introductionmentioning

confidence: 99%

“…A director's education signals his/her intellect and ability to better handle challenges (Bhagat et al, 2010). In fact, highly educated directors (Haniffa and Cooke, 2002;Wang et al, 2017) and academic directors provide better governance to the company in terms of advising and monitoring functions, thereby contributing to the corporate information environment (Cho et al, 2017;Francis et al, 2015;Huang et al, 2016;White et al, 2014). Therefore, this study considers the presence of academic directors on the board at the time of an IPO as an important signalling mechanism that can be used strategically to reduce the degree of risks and uncertainties surrounding the IPO, leading to lower initial returns in the Malaysian IPO market.…”

Section: Introductionmentioning

confidence: 99%

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Academic directors and IPO initial returns

Badru

Zaluki

Hussin

2018

IJBGE

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This study examines the impact of academic directors on IPO initial returns. With a sample of 208 Malaysian IPOs over the period of 2005 to 2015 and applying a quantile regression (QR) technique, this study finds that the academic directors are significantly and negatively associated with IPO initial returns, indicating IPOs with more directors from the academia can better serve as a signal of a company's quality. Such directors are perceived by potential investors as intellectuals capable of providing knowledgeable skills in complex decision-making, like IPO, as well as advising and monitoring the management. These findings indicate that IPO issuers can demonstrate their quality through a highly educated board.

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Section: Academic Directors As a Signalling Mechanismmentioning

confidence: 87%

Section: Variablesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Academic directors and IPO initial returns

Badru

Zaluki

Hussin

2018

IJBGE

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“…Atif et al ( 2019 ) reported a significant negative association between more gender diverse boardroom and cash holdings. Whereas, more diversity in terms of educated tend to keep extra cash (Wang et al 2017 ).…”

Section: Bibliometric Analysismentioning

confidence: 99%

A bibliometric analysis of cash holdings literature: current status, development, and agenda for future research

et al. 2021

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Despite the growing interest in exploring the cash holding aspects among scholars, systematic reviews and comprehensive evaluation in this area has been limited. Also, there is only a fragmented understanding about how the cash holdings concept is formed among researchers and experts. We fill this gap in the literature by identifying and evaluating the research development of cash holdings topic. Using 874 articles from the Scopus database that were published between 1947 and early 2020, bibliometric and content analyses were employed to assess the patterns of global cash holdings research. We find that previous studies have substantially enriched our knowledge of the antecedents and consequences of cash holdings. Yet, there are still several opportunities to make significant contributions in this area. The contribution of this research is to provide a comprehensive evaluation of the development of cash holdings research (using a sizeable archival database). It identifies the current joint development and potential opportunities for future work directions on cash holdings association with payout policy, corporate social responsibility, and corporate governance. Our results are likely to be of interest to academics, practitioners, and educators in related business and finance fields.

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