Ownership structure, corporate governance and corporate liquidity policy

Abstract

PurposeThe purpose of this paper is to examine the impact of ownership structure and corporate governance on corporate liquidity policy from a developing country perspective, Ghana Stock Exchange (GSE).Design/methodology/approachThe authors adopt multiple regression analysis in estimating the relationship between ownership structure, corporate governance and corporate liquidity policy as well as the impact of corporate governance on insider ownership.FindingsThe authors find that foreign share ownership significantly predicts corporate cash holding on the GSE. The empirical result also portrays positive and statistically significant relationship between board size, financial leverage, firm size, profitability and corporate liquidity holding, and a negative and statistically significant relationship between board composition and corporate liquidity holding. The authors also document positive and statistically significant relationship between the various industry classifications namely manufacturing, distribution and the pharmaceutical industry and corporate cash holdings on the GSE but did not however find significant relationship between corporate governance and insider ownership on the GSE. The authors found positive relationship between Tobin's Q and inside ownership.Originality/valueThe main value of this paper is to analyze the relationship between ownership structure, corporate governance and corporate liquid policy from a developing country perspective.

Board Characteristics, Political Connections, and Corporate Cash Holdings: The Role of Firm Size and Political Regime

“…Our typical board size has a mean of about 8 in the whole sample. This result is consistent with (Bokpin, Isshaq, & Aboagye-Otchere, 2011;Zhang et al, 2007). For the whole sample, 47% board members are independent directors.…”

“…It indicates that connected firms with larger BSIZE and BIND hold massive cash. These results support the complementary effect hypothesis and the notion that firms cash holding increases with the increase in BSIZE (Lee & Lee, 2009;Chen & Chuang, 2009;Bokpin et al, 2011) and board independence (Opler et al, 1999). The coefficients of EXD (t-1) * PC and NXD (t-1) * PC with cash holding are significantly negative in democratic regimes.…”

Corporate governance and firm performance in Pakistan: Dynamic panel estimation

“…Typically, board size, for the aggregate sample, has a mean of about 8.00. The current findings have relevance with previous empirical studies (Bokpin, Isshaq, & Aboagye-Otchere, 2011). Similarly, for the whole sample, on average among all board members, 17.1% are independent directors.…”

Ownership Structure and Corporate Governance as The Affecting Factors of Liquidity Policy in Consumption Goods Industry Sector Companies in Indonesian Stock Exchange

“…The economic activities a company are doing is related to the input and a funds for the company or buys a number of stocks of a company and there is a manager who will manage them to make profit. (Bokpin, Isshaq, & Aboagye-Otchere, 2011). Related to the investor and manager, it is seen that in a company there is a separation between funding and management (Bokpin, Isshaq & Aboagye-Otchere, 2011).…”

“…(Bokpin, Isshaq, & Aboagye-Otchere, 2011). Related to the investor and manager, it is seen that in a company there is a separation between funding and management (Bokpin, Isshaq & Aboagye-Otchere, 2011). This then will further imply that there is a separation between ownership and control which implicates the ownership structure.…”