Investigating the Relationship of Corporate Cash Holdings, Corporate Governance, and Firm Performance in Malaysia

2021 ◽  
pp. 263-283
Author(s):  
Kiarash Ehtiat Karrahemi ◽  
Siti Zaleha Abdul Rasid ◽  
Rohaida Basiruddin ◽  
Maizaitulaidawati Md Husin
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Cash Flow ◽  
Panel Data Analysis ◽  
Cash Holdings ◽  
Free Cash Flow ◽  
Flow Theories ◽  
Relationship Of ◽  
The Relationship ◽  
Corporate Cash Holdings

Current practice shows that firms throughout the world are in favor of high cash holdings; yet, they are still performing well. This situation contradicts the agency and free cash flow theories, which suggest that excessive cash may increase agency costs and lower firm performance. The purpose of this study is to examine the relationship between corporate governance, cash holdings, and firm performance. Five thousand four hundred twenty observations were conducted, and a balanced panel data analysis was performed. The results indicate that corporate governance has a significant impact on cash holdings, corporate governance has a significant impact on firm performance, and cash holding has a significant impact on a firm's performance. The findings of this study do not show any evidence to support the agency and free cash flow theories among non-financial Malaysian firms listed on Bursa Malaysia. Thus, this study contributes to the finance and accounting literature by gaining a better understanding of firm performance indicators in Malaysia, specifically.

Corporate Governance and Firm Performance

2015 ◽  
pp. 257-274
Author(s):  
Devanjali Nandi ◽  
Arindam Das
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Stock Price ◽  
Panel Data Analysis ◽  
Negative Relationship ◽  
Crisis Period ◽  
Price Performance ◽  
Time Period ◽  
Relationship Of ◽  
The Relationship

Ownership structure is considered to be of prime importance in corporate governance of a firm. The ownership structure significantly varies across the nations. The main focus of this chapter is twofold: firstly to see the impact of ownership structure on performance of the firm and secondly to investigate the relationship between stock market performance and ownership structure during the crisis period. Panel data analysis of CNX 200 companies has been done for the time period of 2006-2013.The study also takes into account the relationship between crisis period stock return and ownership structure. The results of this study reveal a positive relationship of promoter's shareholding with performance while a negative relationship of performance is found with the non-promoters shareholding. The regression of stock price performance on ownership variable gives a significant negative relationship during the crisis period.

The Impact of Corporate Governance Mechanisms on the Relationship Between Cash Holdings and Audit Fees in Egyptian Listed Companies

2019 ◽  
Vol 9 (2) ◽  
pp. 314
Author(s):  
Eman Abdel-Wanis
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Panel Data Analysis ◽  
Cash Holdings ◽  
Audit Fees ◽  
Governance Mechanisms ◽  
Listed Firms ◽  
Corporate Governance Mechanisms ◽  
The Impact ◽  
The Relationship

This paper explores the impact of corporate governance mechanisms on the nature of the relationship between cash holdings and audit fees, which helps provide an opportunity to identify whether these mechanisms enable to mitigate agency problems, and thus lower audit fees through a sample of 78 Egyptian listed firms in EGX 100 during the period 2014-2016 using panel data analysis. Results indicated that cash holding increases auditing fees. The board characteristics affect negatively on the relationship between cash holdings and audit fees. Also, ownership structure affects negatively on the relationship between cash holdings and audit fees. As well audit committee affects negatively on the relationship between cash holdings and audit fees. There results support the view that corporate governance mitigate on the relationship between cash holdings and audit fees.

scholarly journals Corporate Governance and Firm Free Cash Flows: Evidence from Malaysia

2013 ◽  
Vol 5 (11) ◽  
pp. 531-537
Author(s):  
Razieh Adinehzadeh
Keyword(s):  
Corporate Governance ◽  
Cash Flow ◽  
Audit Committee ◽  
Cash Flows ◽  
Free Cash Flow ◽  
Governance Mechanism ◽  
Data Set ◽  
Corporate Governance Mechanism ◽  
Free Cash Flows ◽  
The Relationship

This study provides view of free cash flow and corporate governance (CG) by addressing the relationship between audit committee characteristics with free cash flow. Specifically, this study explores whether audit committee characteristics are substitutes to control agency problem regarding to free cash flow within Malaysian firms. The data set comprise of 200 firm observations Malaysian companies for four consecutive years, which comprise of 2005 to 2008. The results show that size of audit committee, frequency of audit committee meeting, proportion of audit committee independence is positively associated with level of free cash flow (FCF). The results of study highlight the importance of corporate governance mechanism, in the form of audit committee characteristics, in the management of cash flow.

scholarly journals Determinants of corporate cash holdings: An empirical study of Chinese listed firms

2018 ◽  
Vol 15 (3) ◽  
pp. 57-65
Author(s):  
Rizwan Ahmed ◽  
Wu Qi ◽  
Subhan Ullah ◽  
Danson Kimani
Keyword(s):  
Corporate Governance ◽  
Cash Flow ◽  
Fixed Effects ◽  
Negative Relationship ◽  
Cash Holdings ◽  
Developed Countries ◽  
Bank Debt ◽  
Chinese Context ◽  
The Developed Countries ◽  
Corporate Cash Holdings

This study explores the determinants of corporate cash holdings in the Chinese context. As one of the largest developing countries in the world, China offers an interesting opportunity to explore the role of corporate governance, and ownership structure in explaining corporate cash holdings. Owing to the unique economic problems in the developing and emerging economies, this study aims to investigate whether the research findings on developed countries could be generalized globally. Applying fixed-effects estimations on a sample of 115 Chinese firms listed between 2012 and 2016, we find that the level of corporate cash holdings has a significantly negative relationship with leverage, bank debt, non-cash liquid assets and managerial ownership. In particular, cash flow volatility, investment opportunity and dividend have a significantly positive relationship with cash holdings levels. These findings are consistent with the majority of the existing studies carried out in the Western context. We also find that firm size, cash flow, board independence and ownership concentration have a significant influence on the level of corporate cash holdings. Our study contributes to the finance literature and we offer new insights into the relationship between corporate governance and corporate cash holdings in the Chinese context. Some of the findings on the developed countries could be generalized to a wider context. Further, the unique relationship between corporate governance and cash holdings in the Chinese context provides empirical insights for further research.

Cash Holdings and Corporate Governance

2022 ◽  
pp. 395-416
Author(s):  
Elif Akben-Selcuk ◽  
Pinar Sener
Keyword(s):  
Corporate Governance ◽  
Cash Flow ◽  
Linear Relation ◽  
Cash Holdings ◽  
Family Ownership ◽  
Board Structure ◽  
Factors Affecting ◽  
Cash Reserves ◽  
Nonfinancial Firms ◽  
Corporate Cash Holdings

This chapter investigates the empirical factors affecting corporate cash holdings with special emphasis on corporate governance variables for a sample of Turkish-listed nonfinancial firms over the period 2006 to 2010. The findings reveal a significant non-linear relation between family ownership and cash holdings. In addition, while board structure does not significantly affect the level of cash holdings, tunneling increases cash reserves of firms. Furthermore, the results indicate that cash flow, leverage, other liquid assets that can be used as cash substitutes, the degree of tangibility of assets, and firm size are important in determining cash holdings among Turkish companies.

scholarly journals Effect of Free Cash Flow, Enterprise Risk Management Disclosure and Sustainability Report on Company Value With Corporate Governance as Moderating Variable

SENTRALISASI ◽  
2021 ◽  
Vol 10 (2) ◽  
pp. 140
Author(s):  
Nur Aeni Waly ◽  
Noer Sasongko ◽  
Fatchan Achyani
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Cash Flow ◽  
Firm Value ◽  
Enterprise Risk Management ◽  
Free Cash Flow ◽  
Good Corporate Governance ◽  
Enterprise Risk ◽  
The Relationship ◽  
Sustainability Report

This study aims to analyze the effect of free cash flow, enterprise risk management disclosure, and sustainability report on the value of companies with good corporate governance as a moderating variable listed on the Jakarta Islamic Index companies during the 2015-2019 periods. The samples used were 57 companies in (JII) period 2015 – 2019. The data analysis method used is multiple regressions with the help of Spss 26 to analyze the moderating effect. The results of this analysis show that free cash flow has no effect on firm value, enterprise risk management disclosure does not affect firm value, sustainability report does not has an effect on firm value, and good corporate governance does not moderate the relationship between free cash flow and firm value, good corporate governance moderates the relationship between enterprise risk management disclosure on firm value, and good corporate governance does not affect firm value. moderation of the relationship between the sustainability report and the value of the company.

scholarly journals The determinants of corporate cash holdings levels: evidence from selected South African retail firms

2017 ◽  
Vol 14 (2) ◽  
pp. 79-93 ◽  
Author(s):  
Trust Chireka ◽  
Michael Bamidele Fakoya
Keyword(s):  
South African ◽  
Cash Flow ◽  
Capital Expenditure ◽  
Panel Data Analysis ◽  
Cash Holdings ◽  
Developed Countries ◽  
Liquid Asset ◽  
Dividend Payments ◽  
Cash Flow Volatility ◽  
Corporate Cash Holdings

With corporate cash holdings on the rise, stakeholders need to know, among other things, what informs the companies’ cash holding policies and whether there are any benefits to be derived from piling up these cash reserves. Studies conducted in developed countries have identified the following as determinants of corporate cash holdings: firm size, growth opportunities, liquid asset substitutes, capital expenditure, leverage, dividend payments, cash flows and cash flow volatility. Few studies have focused on what drives firms’ cash holdings behavior in emerging economies. This study, the first of its kind, investigated the determinants of corporate cash holdings in the South African retail industry. The paper used panel data analysis to test the relationships between cash holdings level and the identified determinant factors. The authors found evidence that liquid asset substitutes, capital expenditure, dividend payments and cash flow volatility significantly influence the cash holdings levels of retail firms listed on the Johannesburg Stock Exchange.

scholarly journals FAKTOR-FAKTOR PENENTU STRUKTUR MODAL PADA PERUSAHAAN PROPERTY, REAL ESTATE, AND BUILDING CONSTRUCTION YANG TERDAFTAR DI BURSA EFEK INDONESIA

2020 ◽  
Vol 8 (2) ◽  
Author(s):  
Pascasarjana FEB UNTAN Magister Manajemen
Keyword(s):  
Real Estate ◽  
Capital Structure ◽  
Cash Flow ◽  
Free Cash Flow ◽  
Building Construction ◽  
Company Size ◽  
Growth Opportunities ◽  
Tax Shields ◽  
Relationship Of ◽  
The Relationship

This research aims to analyze how much influence the profitability, tangibility, growth opportunities, non-debt tax shields, free cash flow on capital structure with company size as a moderating variable. Data analysis model used in this research is descriptive statistical analysis and inference. The population in this research are property, real estate and building construction companies listed on the Indonesia Stock Exchange during the period of 2013-2017. The samples were selected by using purposive sampling of 45 companies which sample companies collected with the criteria of having financial reports in a row during the research period. The research results show that the variable of profitability, tangibility, free cash flow had a negative and significant effect on capital structure. While the growth opportunity variable has a positive and significant effect on capital structure. Non-debt tax shields have no effect on capital structure. In addition, company size as a moderating variable has a significant effect as moderation between the relationship of tangibility to capital structure and growth opportunities to capital structure, but does not moderate the relationship of profitability to capital structure, non-debt tax shields to capital structure and free cash flow to capital structure.

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