scholarly journals Corporate Governance and Cash Holding: New Insights from Concentrated and Competitive Industries

2021 ◽  
Vol 13 (9) ◽  
pp. 4816
Author(s):  
Idrees Ali Shah ◽  
Syed Zulfiqar Ali Shah ◽  
Muhammad Nouman ◽  
Farman Ullah Khan ◽  
Daniel Badulescu ◽  
...  
Keyword(s):  
Corporate Governance ◽  
Good Governance ◽  
Market Competition ◽  
Agency Problems ◽  
Developed Countries ◽  
Cash Holding ◽  
Less Developed Countries ◽  
Shareholder Protection ◽  
Value Of Cash ◽  
Excess Cash

The present study empirically investigates the effect of corporate governance on the value of cash holding, usage of excess cash, and firm performance in concentrated and competitive industries in the context of less developed countries. The empirical analysis was conducted in the panel data setting using Pakistan as a case study. Our findings suggest a strong relationship between the value of cash holding and corporate governance, and the complementary effect of product market competition for corporate governance. This suggests that the external market discipline is also needed, in addition to good governance, to resolve agency problems in less developed countries. This is because less developed countries are usually characterized by lower competition, poor mechanisms for shareholder protection, and weak legal systems. Consequently, agency problems are greater in less developed countries compared to developed countries. Our findings also indicate that firms with good governance dissipate less excess cash on internal investment, dividends and diversification in competitive industries. Moreover, the significant positive relationship between the lagged excess cash and corporate governance dummy interaction with the dividend supports the dividend outcome model, particularly in the concentrated industries. Finally, our results suggest that the efficient utilization of excess cash, induced by good governance, leads to better corporate performance in less developed countries.

Corporate Governance Practices and Non-performing Loans of Banking Sector of Bangladesh: A Panel Data Analysis

2019 ◽  
Vol 9 (2) ◽  
pp. 12
Author(s):  
Asia Khatun ◽  
Ratan Ghosh
Keyword(s):  
Corporate Governance ◽  
Commercial Banks ◽  
Banking Sector ◽  
Good Governance ◽  
Panel Data Analysis ◽  
Random Effect ◽  
Developed Countries ◽  
Governance Practices ◽  
Code Of Corporate Governance

This paper tries to inspect the association and relationship between corporate governance determinants and level of non-performing loan (NPL) of listed commercial banks in Bangladesh. Recently Banks are facing a problem of default loan. This default loan or NPL may reduce the loan giving capacity of the Banks and it may decrease the economic growth of a country. Moreover, there is less research to find out the implication of good governance on the level of NPL in banking sector of Bangladesh than that of developed countries. Here, data from thirty listed commercial banks for the year 2008-2017 (10 years) are taken to explore the rapport between the corporate governance variables and NPL. Random Effect GLS regression method is used to analyze the data. Findings told that commercial banks follow the code of corporate governance on a comply basis however their relationship with NPL is positively significant within the taken determinants of corporate governance. It is expected that, banks with good quality management may ensure the quality of loan and it will reduce the level of NPL.

scholarly journals Effect of Corporate Governance on Cash Holding: The Role of Product Market Competition

2018 ◽  
pp. 39-57
Author(s):  
Idrees Ali Shah Et al.,
Keyword(s):  
Corporate Governance ◽  
Market Competition ◽  
Product Market ◽  
Substitution Effect ◽  
Business Environment ◽  
Product Market Competition ◽  
Cash Holding ◽  
Firm Level ◽  
Negative Effect

Corporate cash holding is among the fundamental areas in corporate finance. Recently, corporate cash holding has gained critical attention due to the dynamic business environment. Both practitioners and academicians have focused on the firms’ cash holding decisions in the recent era. The purpose of this research is to investigate the effect of corporate governance on cash holding and to check the role of product market competition on corporate governance and cash holding relationship. The research investigated that whether product market competition plays substitution role for corporate governance in a relationship with cash holding. Substitution effect argument claims that external market discipline is enough to resolve agency problem between managers and shareholders even firm level governance is weak. For this study, unbalanced panel data of 196 companies from the year 2006 to 2014 is selected. All models include time dummies and industry fixed effect with standard error cluster to the firm. The results show that corporate governance has a significant negative effect on corporate cash holding which supports flexibility hypotheses. Moreover, product market competition has substitution role for corporate governance in relationship with corporate cash holding.

scholarly journals Corporate Governance in Less Developed Countries

2015 ◽  
Vol 2015 (1) ◽  
pp. 14377 ◽  
Author(s):  
Danson Kimani ◽  
Howard Viney ◽  
Devendra Kodwani
Keyword(s):  
Corporate Governance ◽  
Developed Countries ◽  
Less Developed Countries

scholarly journals Towards good governance of heritage management systems: Possible role of accounting

2018 ◽  
Vol 15 (3-1) ◽  
pp. 239-259
Author(s):  
Nabiela Noaman ◽  
Johan Christiaens ◽  
Hassan Ouda ◽  
Dina El Mehelmy
Keyword(s):  
Content Validity ◽  
Financial Management ◽  
Good Governance ◽  
Developed Countries ◽  
Heritage Management ◽  
Management Systems ◽  
Less Developed Countries

This study contributes to the debate on what constitutes “good governance in the heritage sector” by identifying and testing measurable determinants for good governance (GG) of heritage management (HM), with special attention to financial management and accountability. The deductive approach is used to discern the determinants, while Lawshe (1975) method is used to quantify the results of the content validity. The checklist applicability is investigated, by comparing the appropriated determinants to the practices of the pioneer countries mainly, England and Australia. The compliance of Egypt with GG of HM is assessed to identify the variation in GG of HM between developed and less-developed countries. The results of which reveal much deficiencies and flaws in Egypt’s heritage governance and management and the urgent need for reform.

Agency Problem Types From a Corporate Governance Perspective

2017 ◽  
pp. 175-191
Author(s):  
Nazih Khalil El-Jor
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Agency Theory ◽  
Emerging Economies ◽  
Agency Problems ◽  
Developed Countries ◽  
Third Parties ◽  
Problem Types ◽  
Governance Systems ◽  
Self Interest

Corporate Governance systems adequately address problems related to accountability and transparency in developed countries. However, in emerging economies these systems are susceptible to exploitation by self-interest-minded individuals entrusted in managing the organization in some cases, by majority shareholders in other cases and at times by third parties from outside the organization. This exploitation falls under the concept of Agency Theory which emerges as a matter of concern that should be dealt with by Corporate Governance systems. Under the Agency Theory, the author classifies the Agency related problems into three types; “Type One”, “Type Two” and “Type Three”. All three types emanate from the separation of ownership and decision making complemented by the natural reality of self-interest requiring thus internal mechanisms of control in order to mitigate the Agency problems along with all Agency related costs. The paper then deals with such mechanisms.

scholarly journals Related-Party Transactions, Chaebol Affiliations, and the Value of Cash Holdings

2021 ◽  
Vol 13 (2) ◽  
pp. 699
Author(s):  
Hyunjung Choi ◽  
Jungeun Cho
Keyword(s):  
Corporate Governance ◽  
Cash Holdings ◽  
Agency Problems ◽  
Governance Structure ◽  
Management Decisions ◽  
Corporate Governance Structure ◽  
Related Party Transactions ◽  
Public Firms ◽  
Extant Literature ◽  
Value Of Cash

This study examines whether related-party transactions (RPTs) impact the value of firms’ cash holdings. Using a 2011–2018 sample of Korean public firms, we find that greater RPTs lead to lower cash holdings value. In particular, this decline is more pronounced in Korean chaebol firms than in non-chaebol firms. Our findings suggest that a unique and complex corporate governance structure of chaebol firms makes it difficult for outside investors to monitor firms’ internal cash management decisions, resulting in a negative valuation of cash holdings. This study contributes to the extant literature by providing additional evidence that RPTs in chaebol firms with severe agency problems may lower the value of cash holdings.

The Effect of Cost Stickiness on the Value of Cash Holding

2020 ◽  
Vol 45 (6) ◽  
pp. 189-236
Author(s):  
Sun-Hwa Kim ◽  
Yong-Ki Jung
Keyword(s):  
Cash Holding ◽  
Value Of Cash ◽  
Cost Stickiness

Board Effectiveness: An Evaluation based on Corporate Governance Score

Think India ◽  
2015 ◽  
Vol 18 (1) ◽  
pp. 16-23
Author(s):  
Hitesh Shukla ◽  
Nailesh Limbasiya
Keyword(s):  
Corporate Governance ◽  
Good Governance ◽  
Sustainable Growth ◽  
Governance Mechanism ◽  
Minority Shareholders ◽  
Effective Governance ◽  
Performance Orientation ◽  
Corporate Governance Mechanism ◽  
And Performance ◽  
Ethical Governance

Growth, progress, and prosperity of any country depend highly on the corporate governance mechanism of that country. Good governance of a country helps it to sustainable growth and consistency in progress. The good governance should contribute towards the improvement in transparency, ethics, morality, and disclosure. The principles of good governance stand on honesty, trust, integrity, openness, and performance orientation. Our honorable Prime Minister Narendra bhai Modi had given the three E for good governance during his speech on Independence Day i.e. Effective Governance, Electronic Governance, and Ethical Governance. The fundamental concern of corporate governance mechanism is to ensure the protection of minority shareholders/owners of specific firms. Mechanism of a corporate governance specifies the relations among the shareholders, board of directors, and managers. The present paper is an attempt to evaluate the effectiveness of the board by calculating the corporate governance score. The mandatory and non-mandatory guidelines have been considered while assigning points to specific parameters of the corporate governance.

Impact of Corporate Governance on the Cash Holding of the Firms: An Empirical Study of Indian Manufacturing Sector

GIS Business ◽  
2017 ◽  
Vol 12 (4) ◽  
pp. 47-52
Author(s):  
Karam Pal Narwal ◽  
Sonia Jindal
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Manufacturing Sector ◽  
Control Variable ◽  
Cash Holding ◽  
Executive Directors ◽  
Control Effect ◽  
Board Size ◽  
Indian Manufacturing Sector ◽  
The Impact

The paper empirically examines the impact of corporate governance on the cash holding of the firms. The components of corporate governance are measured by board size, board meeting, audit committee members, directors remuneration and non executive directors and the cash holding is measured with the log of average cash and size is taken as control variable for the control effect on the dependent variables. Moreover, correlation and panel regression model were employed to examine the relationship between the corporate governance and cash holding. Empirical data was collected from 96 firms over the period of 2004-05 to 2013-14. The results show that directors remuneration and the number of audit committee members positively influence the cash holding and the board size also positively influences the cash holding whereas, the non executive directors and the board meetings do not play any role in enhancing the cash holding.

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