Investment committees and corporate cash holdings

Al-Hadi, Al-Hadi Ahmed; Eulaiwi, Baban; Al‐Yahyaee, Khamis Hamed; Duong, Lien; Taylor, Grantley

doi:10.1016/j.najef.2020.101260

Cited by 16 publications

(22 citation statements)

References 89 publications

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“…Optimal supervision will reduce the potential for conflicts of interest between managers and shareholders (Ozkan & Ozkan, 2004). Al-Hadi et al (2020) stated that institutional investors conduct optimal supervision and prevent adverse investment decisions for the company. This is because institutional investors have better access to information about the company so that they can assess actual performance and identify companies with improved performance in the future.…”

Section: Institutional Holdings and Cash Holdingsmentioning

confidence: 99%

The Effect of Corporate Governance on Cash Holdings

Darma,

Lukviarman,

Setiany

2021

jda

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Purpose: This study aims to tests the effect of corporate governance on cash holdings empirically. This study proxies corporate governance into four proxies: family ownership, institutional ownership, size of the board of commissioners, and proportion of independent commissioners. In addition, this research uses five control variables, namely, bank relationship, company size, leverage, return on assets, and cash flows.Method: The samples were chosen based on the purposive sampling technique from consumer goods companies listed in the Indonesian Stock Exchange during 2015-2019, with 77 firm years. In order to test hypotheses, this study performed multiple regression analysis.Finding: The results showed that board independence negatively affect cash holdings, while family ownership, institutional ownership, and board size have not.Novelty: This study extends the limited previous research on the relationship between corporate governance and cash holdings, especially in the consumer goods industry sector listed on the Indonesia Stock Exchange for the period 2015-2019.

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Section: Institutional Holdings and Cash Holdingsmentioning

confidence: 99%

The Effect of Corporate Governance on Cash Holdings

Darma,

Lukviarman,

Setiany

2021

jda

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“…e trade-off theory believes that the optimal level of cash is determined through the trade-off among the marginal costs and cash holding [26,79,80]. Ferreira and Vilela [30] suggested that cash holding has three advantages: (1) shrink the possibility of financial distress, (2) make investment policy less vulnerable during financial constraints, and (3) reduce external financing cost.…”

Section: 1mentioning

confidence: 99%

Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms

Um-e-Habiba

Husnain³

et al. 2021

Complexity

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This study contributes to the literature by exploring the relationship between board financial expertise and cash holding policy and further showing how this relation is moderated by multiple large shareholders (MLS). This research is based on agency theory, resource dependence, trade-off, and pecking order theory to confirm how resourceful directors screen cash holding practices. This study selects the 100 listed family firms from the emerging economy of Pakistan for the period of 2006–2017. With the use of static (random and fixed effect estimator) and dynamic (GMM) estimation techniques, this study reveals that the financial expertise of the board members has a significant negative impact on the firms’ cash holding level. Further, moderating effect of MLS between board financial expertise and cash holding is significantly positive due to weak corporate governance mechanisms in family firms. Moreover, the research has implications for developing corporate governance mechanism and the management of liquid assets that corporate management might use for their benefits.

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“…Accounting conservatism (AC) is therefore calculated based on this index using the following formula: CFO =Cash flow from operating activities 𝑇𝐴 t-1 = Total assets at the beginning of the year Three models are used here to reflect the impact of accounting conservatism on cash holdings, dividend payment and leverage. In model one, cash holding (CASH) is measured by the ratio of cash and cash equivalent to total assets (Al-Hadi et al, 2020;Al-Amri et al, 2015;Soliman, 2019). In model two, cash dividends (DIVIDENDS) are measured by the ratio of dividends paid to shareholders to total assets (Al Lawati & Hussainey, 2021;Jiraporn et al, 2011).…”

Section: Variables Measurementmentioning

confidence: 99%

The Association between Accounting Conservatism and Cash Holding, Dividends and Leverage

Atwa

Bsoul

Kharabsheh

et al. 2022

Acad. J. Interdiscip. Stud.

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This paper examines the effect of accounting conservatism on several financial decisions in Jordan. In particular, it aims to expose the effect of accounting conservatism on cash holdings, dividends distributions, and leverage for a sample of 83 Jordanian industrial and service firms listed on the Amman Stock Exchange (ASE) for the period 2015-2019. The feasible generalised least squares (FGLS) regression technique is used to test the association between accounting conservatism and financial decisions. The findings of this paper reveal a negative and significant relationship between accounting conservatism and cash holding. However, positive but insignificant relationships are reported between accounting conservatism and both dividends distributions and leverage. These findings have important implications for investors, corporate managers, and policymakers. The study recommends that future research use different measures of leverage, such as debt-to-equity ratio and long-term debt to equity ratio, in order to compare the results of different measuring instruments. It also recommends incorporating other measures of conservatism, such as market to book ratio and timeliness asymmetric measure. Received: 23 March 2022 / Accepted: 20 June 2022 / Published: 5 July 2022

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Investment committees and corporate cash holdings

Cited by 16 publications

References 89 publications

The Effect of Corporate Governance on Cash Holdings

The Effect of Corporate Governance on Cash Holdings

Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms

The Association between Accounting Conservatism and Cash Holding, Dividends and Leverage

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