Impact of banking relationships and ownership concentration on corporate cash holdings in India

Saxena, Vedika; Sahoo, Seshadev

doi:10.1108/ara-01-2022-0014

Cited by 3 publications

(2 citation statements)

References 80 publications

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“…In line with existing literature on cash holdings and MSME (Al-Najjar, 2015; Faulkender, 2002; García-Teruel and Martínez-Solano, 2008; Opler et al. , 1999; Ozkan and Ozkan, 2004; Saxena and Sahoo, 2022), the general form of equation for models estimating dynamic panel regression in the context of MSMEs is given below:…”

Section: Methodsmentioning

confidence: 99%

What drives corporate cash holdings in MSMEs?: Evidence from India

Saxena

Sahoo

2022

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PurposeThis study investigates the factors affecting corporate cash holdings for a sample of 598 Indian Micro, small and medium-sized enterprises (MSMEs) for nine years (2011–2020).Design/methodology/approachThe system generalized method of moments (GMM) approach is used to examine the determinants of cash holdings in the Indian MSME context.FindingsThe article shows liquidity, cash flow, leverage, firm size, probability of financial distress and cash flow volatility significant in explaining cash holding decisions for MSMEs in India. No evidence of firm age and growth opportunities as determinants of cash holdings in Indian MSMEs has been found. In addition, strong evidence of cash flow volatility, cash flow and liquidity in differentiating the cash holding decisions in the service and manufacturing industry has been documented.Originality/valueWhile earlier research has addressed this problem in developed nations, this is the first study that fulfills the need to investigate the variables that influence MSMEs' cash holding decisions in a developing economy like India.

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Section: Methodsmentioning

confidence: 99%

What drives corporate cash holdings in MSMEs?: Evidence from India

Saxena

Sahoo

2022

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“…Hence, the ESG's relationship with a firm's value should also be investigated under the moderation of TD and ownership. There is a voluminous literature on OC's influence on the valuation of the firms (Da Silva and leal, 2006;Edwards and Weichenrieder, 2004;Elyasiani and Jia, 2010;Saxena and Sahoo, 2022). Literature also supports OCs' influence on ESG scores (Younas et al, 2017).…”

Section: Oc and Esg's Association With Valuationmentioning

confidence: 99%

Firm's value and ESG: the moderating role of ownership concentration and corporate disclosures

Rastogi

Singh

Kanoujiya

2023

ARA

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PurposeThe study intends to determine the environment, social and governance (ESG)'s impact on the firm's value. In addition, how ownership concentration (OC) and transparency and disclosures (TD) influence the impact of firm's ESG on its valuation (firm value).Design/methodology/approachThe relevant panel data with a sample of 78 Indian firms for five years (2016–2020) are gathered. Both linear and nonlinear connections of firm's ESG with its value are tested. In addition, TD and two components of OC (stakes of promoters and institutional investors) are empirically tested as moderators on the connectivity of the firm's ESG with its value.FindingsThe linear association of firm's ESG with its value is found insignificant. ESG is found to have a positive and nonlinear (U-shaped) impact on the value of the firms. TD does not moderate the connectivity of firm's ESG with its valuation (firm value). The higher stakes of promoters positively affect the association of firm's ESG with the valuation. However, the high stakes of institutional investors retard the ESG's influence on the firm value.Research limitations/implicationsThe study is on Indian firms for five years. A sample of more than one nation and a longer duration (10 years) could have helped better determine the associations among the variables. In turn, these limitations can be the present study's future scope. In addition, the authors find a lack of standardisation of the ESG scales, which is a problem in measuring it. Using standardisation scales of ESG for the analysis can also be future scope on the topic.Practical implicationsThe investors would be wary of the level of ESG to influence the firms' value positively. Managers also need to be careful to have sincere efforts for ESG to reap its rich dividends. Policymakers may take cognisance that despite having board seats (in a few cases), institutional investors negatively (instead of positively as expected) influences the ESG's association with the firm's value. They may bring some guidelines or legislative changes to fix responsibility on the part of the institutional investors.Originality/valueNo study reports the linear and nonlinear association of ESG on the firm's value to observe clearer connectivity between the two. Similarly, no study is observed to have promoters and institutional investors as moderators on the association of firm's ESG with the valuation (firm value). Hence, the present study considerably augments the extant literature on the topic and its contribution.

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Corporate Cash Holdings and Share Buyback: Evidence from Emerging Markets

Saxena

Sahoo

2023

Journal of Emerging Market Finance

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This study evaluates corporate cash holdings (CCHs) as a determinant of share buyback for three emerging economies, India, Malaysia, and South Korea, from 2002 to 2020. We find CCH as a significant determinant of share buyback for our sample nations. Our results suggest that share buyback is a flexible way for firms to distribute excess cash across our sample nations. Our study also documents the impact of different country-level investor protection frameworks on buybacks. A favorable relationship between a strong investor protection environment (good governance) and buyback explains the effective role of buyback in resolving agency conflicts compared to dividends. JEL Codes: C5, F3, G3

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Impact of banking relationships and ownership concentration on corporate cash holdings in India

Cited by 3 publications

References 80 publications

What drives corporate cash holdings in MSMEs?: Evidence from India

What drives corporate cash holdings in MSMEs?: Evidence from India

Firm's value and ESG: the moderating role of ownership concentration and corporate disclosures

Corporate Cash Holdings and Share Buyback: Evidence from Emerging Markets

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