The effect of managerial horizon on cash holdings

2019 ◽  
Vol 45 (8) ◽  
pp. 1092-1110
Author(s):  
Sanjib Guha ◽  
Niazur Rahim
Keyword(s):  
Design Methodology ◽  
Cash Holdings ◽  
Previous Literature ◽  
Cash Holding ◽  
Firm Characteristics ◽  
Current Compensation ◽  
Content Type ◽  
Ceo Age ◽  
Excess Cash ◽  
Managerial Horizon

Purpose US corporations are now sitting on an enormous stockpile of cash. Instead of investing their resources and creating jobs, the firms are holding on to excess cash. Academicians and practitioners alike have tried to fathom the reasons why companies are holding on to so much cash. Numerous studies have talked about the various motives for holding cash. Many researchers have tried to correlate excess cash holding with particular firm characteristics. The purpose of this paper is to study the correlations that exist between excess cash holding and some measurable managerial characteristics. Design/methodology/approach Four different measures of managerial horizon (MH) were constructed. The first two constructs (MH1 and MH2) are based on the CEO’s age and how long he has been the CEO of the company. The next two constructs (MH3 and MH4) are based on compensation, proportion of current compensation and proportion of future compensation. This paper tries to examine if MH has any impact on excess cash holding. Findings The results clearly show that the CEO age and the proportion of CEO’s compensation (current and future) do determine level of cash holding in the company. Younger CEOs hold more cash compared to older CEOs. Older CEOs hold less cash suggesting that as CEOs grow older they might be motivated by the idea of leaving a long lasting legacy. CEOs who receive more of their compensation in future payments also hold on to more cash, whereas CEOs who receive more of their compensation in current payments hold less cash. Originality/value There is no previous literature dealing with MH and cash holding by corporations.

After a market panic: cash is king

2014 ◽  
Vol 40 (5) ◽  
pp. 506-534 ◽  
Author(s):  
Garrett C.C. Smith
Keyword(s):  
Design Methodology ◽  
Implied Volatility ◽  
Cash Holdings ◽  
Market Uncertainty ◽  
Cross Sectional ◽  
Financial Flexibility ◽  
Content Type ◽  
Excess Cash ◽  
Debt Capacity ◽  
High Uncertainty

Purpose – The purpose of this paper is to examine the effects of financial flexibility as represented by excess cash holdings and debt capacity upon firm returns after periods of high market uncertainty. Design/methodology/approach – Days of high uncertainty are identified from 1987-2011 using the VXO Index (implied volatility of the S&P 100) yielding approximately 45,000 firm events. The main variables of interest are excess cash (Duchin et al., 2010) and debt capacity. Two financial constraint indexes are used as controls in a cross-sectional OLS regression. Findings – The precautionary value of cash during and after times of uncertainty is beneficial. A positive relationship exists for periods of up to two years following the initial day of high uncertainty. Positive BHRs exist on a zero-cost trade investing in a portfolio of high excess cash firms and shorting a portfolio of cash constrained firms. The value of excess debt capacity, on the other hand, is harder to discern; positive profits are obtainable on a zero-cost trade while regression estimates are typically insignificant on average. Originality/value – This paper expands the financial flexibility literature by testing the effects of financial flexibility on returns following days of high market uncertainty.

A conceptual framework to address barriers to knowledge management in project-based organizations

2014 ◽  
Vol 7 (2/3) ◽  
pp. 98-119 ◽  
Author(s):  
Peyman Akhavan ◽  
Mohammad Reza Zahedi ◽  
Seyed Hosein Hosein
Keyword(s):  
Knowledge Management ◽  
Conceptual Framework ◽  
Design Methodology ◽  
Previous Literature ◽  
Content Type ◽  
Stepping Stone ◽  
Iranian Context ◽  
Level Of Importance ◽  
Practical Implications

Purpose – The purposes of this study are to identify, classify and prioritize knowledge management (KM) barriers in an Iranian project-based organization (PBO) and to present a conceptual framework for improving attitudes to KM in the Iranian context. Design/methodology/approach – After studying previous literature on the topic, initial barriers of KM in PBOs were extracted. Then, a list of barriers of KM in the aforementioned organizations was finalized by interviewing experts in KM. After that, the barriers were prioritized using a questionnaire. Finally, a conceptual framework for successfully tackling KM barriers was presented. Findings – In this article, barriers of KM in PBOs have been divided into five categories: individual, organizational, technological, contextual, and inter-project. Then a three-layered conceptual framework has been presented which describes how the barriers of KM in PBOs may be removed progressively. Practical implications – The prepared and prioritized list of barriers of KM in PBOs is a stepping stone and a guideline for managers in PBOs which will enable them to identify barriers of KM in their own organizations and resolve them and improve KM in their organizations. It also serves as a useful base for researchers to expand further research concerning barriers of KM in PBOs. Originality/value – This article is probably the first article which has identified barriers of KM via interviews and questionnaires carried out in 50 active PBOs which had a KM section. The article also presents a three-layered framework for lowering barriers of KM, which can be applied step by step after considering the level of importance of each one identified.

Revitalising Waqf (endowment) lands for agribusiness: potentials of the anchor company models

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Norfaridah Ali Azizan ◽  
Amirul Afif Muhamat ◽  
Sharifah Faigah Syed Alwi ◽  
Husniyati Ali ◽  
Amalia Qistina Casteneda Abdullah
Keyword(s):  
Household Income ◽  
Design Methodology ◽  
Potential Role ◽  
Islamic Law ◽  
Living Condition ◽  
Previous Literature ◽  
Content Type ◽  
Muslim Countries ◽  
The Right

PurposeWaqf (endowment) lands constitute as among the highest types of waqf (endowment) properties in Malaysia; yet it is still unable to reach its maximum potential due to various challenges such as capital, location, legal and administrative issues. Therefore, this study intends to explore these issues by focussing on the two states in Malaysia (Selangor and Perak) that have fertile lands but different management authorities.Design/methodology/approachThere were series of interviews that had been conducted with ten (10) key informants who are experts and practitioners in the areas of Shariah (Islamic law), farming, agribusiness, land management and waqf.FindingsFindings exhibit that constraints and challenges that had been highlighted in the previous literature still exist (although some improvements had been made), but there is emerging theme that the study intends to highlight which is on the needs to secure market for the agribusiness produce and the potential role of anchor company in the agribusiness. It is pertinent that for agribusiness to thrive, selecting the right anchor company that has the capacity to address the challenges is necessary. This study posits two anchor company models (Waqf Trustee-Anchor Company and Waqf Trustee-Anchor Company-Community Farmers) that can be applied for agribusiness on the waqf lands.Research limitations/implicationsThis study is based on the Malaysia's context influenced by specific country's features. Nevertheless, such findings can still be used as reference or benchmark by other endowment trustees in other countries especially for the Muslim countries as well as the non-Muslim countries that have significant Muslim populations.Social implicationsThe suggested models have potentials to improve the living condition of the B40 (below 40% household income) in Malaysia because the models encourage their participation in the agribusiness activities.Originality/valueThis study focusses on the agribusiness, which is rarely being given attention in previous literature in the context of endowment lands. Therefore, this article bridges the literature gap and at the same time attempts to provide suggestion to address the pertinent issue – the underutilised endowment lands.

Corporate payout-form: investors’ preference and catering theory

2018 ◽  
Vol 44 (12) ◽  
pp. 1418-1433
Author(s):  
Abdelaziz Chazi ◽  
Alexandra Theodossiou ◽  
Zaher Zantout
Keyword(s):  
Design Methodology ◽  
Policy Formulation ◽  
Future Research ◽  
Stock Repurchases ◽  
Firm Characteristics ◽  
Content Type ◽  
Robust Measures ◽  
Practical Implications ◽  
Form Preference ◽  
Number Of Firms

Purpose The purpose of this paper is to develop and validate new robust measures of investors’ preference for the form of regular corporate payout. Then, the paper adds to the empirical evidence on catering theory by examining managers’ catering to such preference. Design/methodology/approach The authors use the matching method to control for firm characteristics. The authors apply two robustness tests to validate the measures. The authors use the rigorous multivariate analysis. Findings US investors’ preference for regular dividends vs regular stock repurchases, being different forms of corporate payout, varies over time. Managers cater to investors’ preference for payout form. The findings are consistent with the catering theory of Baker and Wurgler (2004a). The number of firms that pay cash dividends regularly continue to outnumber the ones that purchase their shares regularly. Research limitations/implications The study only uses US data. It does not cover other countries. Practical implications The measures can be used in several future research endeavors, such as examining investors’ payout-form preferences in other countries (see Booth and Zhou, 2017) and exploring their determinants, the corporate governance characteristics of firms that cater to investors’ preference vs firms that do not, etc. Social implications The study contributes to understanding investors’ preferences and corporate payout behavior which is prerequisite to efficient policy formulation. Originality/value The proxies for investors’ payout-form preference control for firm characteristics and are unrelated to investors’ time-varying risk preferences. Also, they are robust to measurement issues. Moreover, the study covers a period of 40 years.

Genre analysis of bookmarked webpages

2010 ◽  
Vol 34 (6) ◽  
pp. 954-971 ◽  
Author(s):  
Michela Montesi
Keyword(s):  
Relevance Feedback ◽  
Design Methodology ◽  
Genre Theory ◽  
Point Of View ◽  
Previous Literature ◽  
Genre Analysis ◽  
Content Type ◽  
Clear Tendency ◽  
Information Reuse

PurposeA total of 17 user‐compiled collections of webpages, comprising 833 bookmarked links in terms of genre, are studied. The purpose of this paper is to find out whether users tend to bookmark certain web genres more than others. Genre theory helps to make sense of the different pages included in these collections, and to classify them, according to their communicative purpose and salient non‐topical features, into blogs, search interfaces, articles, tutorials.Design/methodology/approachA total of 17 participants took part in the research by providing their collections of bookmark links. They were also interviewed about the reasons for bookmarking and to comment on their collections. Relying on the interview results and on the previous literature, the bookmarks were classified into four super‐genres: main or access pages, transactional pages, navigational pages, and content pages.FindingsThe results of the classification into web genres revealed a clear tendency to bookmark main pages, such as homepages, which accounted for 42 per cent of all bookmarked web links. Moreover, some aspects of relevance were highlighted such as the connections to use, time, and context, as well as to the main web activity (browsing or searching).Originality/valuePreviously, bookmarks have mostly been studied as tools for information reuse, but very rarely as sources of implicit relevance feedback. In addition, from the point of view of genre theory, this research shows the importance of relating web genres to users' intentions behind queries.

Graduating students’ standpoints on Wasta as a ‘gateway’ to employment: motives and influences

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Arwa Al-Twal ◽  
Khaled Aladwan
Keyword(s):  
Design Methodology ◽  
Private University ◽  
Previous Literature ◽  
Equal Opportunities ◽  
Structured Interviews ◽  
Content Type ◽  
Negative Impacts ◽  
Graduating Students ◽  
Harmful Effects

Purpose This study aims to uncover graduating students’ standpoints on Wasta through exploring their motives to use it and its potential influences on them particularly when they move to a workplace (i.e. after leveraging it to gain employment). Design/methodology/approach Semi-structured interviews were conducted with 26 graduating students studying at a Jordanian private university. Findings Graduating students considered Wasta as a gateway to employment, which rationalised their motives to use it in terms of the perceived lack of equal opportunities in the market, and the absence of rules and regulations that inhibit it. However, they also perceived that being hired through Wasta could have positive and negative impacts on them. Originality/value The findings of the study enriched the understanding of various aspects of Wasta, such as why it is used, how it works and how it could have harmful effects on those who benefit from it in addition to those who do not have it, while previous literature primarily focussed on the latter. Although individuals may share similar contextual pressures that encourage them to use Wasta for employment purposes, this research shows that they would accept and justify its use for themselves, yet reject it for others. This study emphasises the need to conduct further research to explain these contradictory views. It also suggests exploring the motives of the patrons of Wasta and its influences on them when they offer it. This is to understand the psychology of offering Wasta and identify the roles of the parties who get involved in it.

Adult third culture kids: expatriate potential is one piece of the puzzle

2020 ◽  
Vol 26 (5/6) ◽  
pp. 319-323
Author(s):  
Megan P. Nash
Keyword(s):  
Intercultural Competence ◽  
Personal Development ◽  
Design Methodology ◽  
Strong Support ◽  
Third Culture Kids ◽  
Previous Literature ◽  
Third Culture ◽  
Global Business ◽  
Content Type ◽  
Potential Source

Purpose Adult third culture kids (ATCK) have been identified as a potential source for global business because of their experience in expatriation and increased intercultural competence. The purpose of this paper is to build on existing research focused on this population and to highlight crucial areas for further study to gain more comprehensive insight to their potential in working teams. Design/methodology/approach This viewpoint design reviews previous literature and research on ATCK and their potential for business expatriation and raises questions for areas of necessary further research to better understand their impact upon assignment. Findings There is strong support for ATCK suitability and inclination for expatriate assignment from previous literature. There is much unknown about their performance upon expatriation and a need for further research specific to ATCK performance in teams and organizations. Originality/value This study poses questions about translating ATCK experience into team performance; emphasizes the challenges in isolating one trait in personal development and the risks of conflating ATCK experience in professional capabilities.

Does Shariah compliance affect corporate cash holdings and cash adjustment dynamics? Evidence from Malaysia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Moncef Guizani ◽  
Gaafar Abdalkrim
Keyword(s):  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Cash Holdings ◽  
Cash Flows ◽  
Least Square ◽  
Cash Holding ◽  
External Financing ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Cash Holdings

Purpose The purpose of this paper is to investigate the effect of Shariah compliance status on corporate cash holding decision. Design/methodology/approach This study applies ordinary least square and generalized method of moments regression models for a sample of 178 Malaysian listed firms over the period 2008–2017. Findings The results show that Shariah compliance has positive impact on the level of cash reserves of firms. It is also found that Shariah-compliant (SC) firms quickly adjust their level of cash holdings toward a target level than non–Shariah-compliant (NSC) firms. These results can be explained by the restrictions imposed by Shariah rules on firms to sustain their compliance status. Further, the results reveal that SC firms are likely to hold more cash out of their cash flows. This is the expected result, as the firms operating within the ambit of Shariah rulings and regulations face external financing constraints. Practical implications This study has important implications for managers, policymakers and regulators. For managers, the study is an important reference to understand and design cash management policies by considering restrictions imposed by Shariah regulations. In particular, managers should pay more attention to periods of credit crunch and weak economic conditions in which SC firms may be exposed to greater bankruptcy risks. For policymakers and regulators, this study may be useful in assessing the effect of the restrictions imposed by Shariah law on firm’s cash holding decision. Therefore, in an effort to increase the supply of external financing available to SC firms, policymakers should encourage the issuing of Islamic financial products. Originality/value This paper focuses on SC firms where financial constraints are bound to be more stringent than for NSC firms. It explores the implications of relevant Islamic principles on corporate cash holdings.

scholarly journals Does executive ownership lead to excess target cash? The case of UK firms

2017 ◽  
Vol 17 (5) ◽  
pp. 876-895 ◽  
Author(s):  
Alfonsina Iona ◽  
Leone Leonida ◽  
Alexia Ventouri
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Cash Holdings ◽  
Logit Analysis ◽  
Governance Mechanism ◽  
Governance System ◽  
Content Type ◽  
Excess Cash ◽  
The Uk ◽  
The Impact

Purpose The aim of this paper is to investigate the dynamics between executive ownership and excess cash policy in the UK. Design/methodology/approach The authors identify firms adopting an excess policy using a joint criterion of high cash and cash higher than the target. Logit analysis is used to estimate the impact of executive ownership and other governance characteristics on the probability of adopting an excess cash policy. Findings The results suggest that, in the UK, the impact of the executive ownership on the probability of adopting an excess cash policy is non-monotonic, in line with the alignment-entrenchment hypothesis. The results are robust to different definitions of excess cash policy, to alternative specifications of the regression model, to different estimation frameworks and to alternative proxies of ownership concentration. Research limitations/implications The authors’ approach provides a new measure of the excess target cash for the firm. They show the need to identify an excess target cash policy not only by using an empirical criterion and a theoretical target level of cash, but also by capturing persistence in deviation from the target cash level. The authors’ measure of excess target cash calls into questions findings from previous studies. The authors’ approach can be used to explore whether excess cash holdings of UK firms and the impact of managerial ownership have changed from before the crisis to after the crisis. Practical implications The authors’ measure of excess target cash allows identifying in practice levels of cash which are abnormal with respect to an equilibrium level. UK firms should be cautious in using executive ownership as a corporate governance mechanism, as this may generate suboptimal cash holdings and suboptimal firm value. Excess cash policy might be driven not only by a poor corporate governance system, but also by the interplay between agency costs of managerial opportunism and cost of the external finance which further research could explore. Originality/value Actually, “how much cash is too much” is a question that has not been addressed by the literature. The authors address this question. Also, this amount of cash allows the authors to study the extent to which executive ownership contributes to explain the out-of-equilibrium persistency in the cash level.

Effect of Cash Holding Policy of Financially Constrained Firms on Their Market Performance

2018 ◽  
Vol 43 (1-2) ◽  
pp. 31-45
Author(s):  
Nidhi Singh
Keyword(s):  
Capital Structure ◽  
Stock Return ◽  
Market Performance ◽  
Cash Holdings ◽  
Market Value ◽  
Excess Return ◽  
Cash Holding ◽  
Market Return ◽  
Indian Context ◽  
Excess Cash

Our study is based on the methodology suggested by Faulkender and Wang (2006) in the Indian context, to discuss the various aspects of cash holding policy with respect to financially constrained (FC) and unconstrained firms. Primary goal of the study is to understand shareholders’ perception on the level of cash holdings in constrained and unconstrained firms, and how much value they give to excess cash holdings with respect to cash level and capital structure of a firm. This study also analyzes the shareholders’ perception, which is measured by stock return, and market value of asset, by determining the variation, in excess return and Tobin’s Q over the last 10 years. The result shows less or no effect of excess cash holding either in average firms or in constrained firms. Findings also suggests that shareholders, prefer large firms to maintain excess cash for investment, or to fulfil their liabilities on time. Overall the findings determine the importance of cash level but also indicate the presence of other determinants of the firms, to enhance market return and build shareholders perception.

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