Have a personal or library account? Click to login
Corporate governance, excess-cash and firm value: Evidence from ASEAN-5 Cover

Corporate governance, excess-cash and firm value: Evidence from ASEAN-5

By: Tahir Akhtar  
Open Access
|Jan 2023

References

  1. Abdullah, S. N. (2004). Board composition, CEO duality and performance among Malaysian Listed Companies. Corporate Governance, 4(4), 47‒61.10.1108/14720700410558871
  2. Acemoglu, D., Johnson, S., Robinson, J. A., & Thaicharoen, Y. (2003). Institutional causes, macroeconomic symptoms: Volatility, crises, and growth. Journal of Monetary Economics, 50(1), 49‒123.10.1016/S0304-3932(02)00208-8
  3. Acharya, V., Amihud, Y., & Litov, L. (2011). Creditor rights and corporate risk-taking. Journal of Financial Economics, 102(1), 150–166.10.1016/j.jfineco.2011.04.001
  4. Akhtar, T., Tareq, M. A., & Rashid, K. (2021a). Chief executive officers’ monitoring, board effectiveness, managerial ownership, and cash holdings: Evidence from ASEAN. Review of Managerial Science, 15(8), 2193‒2238.10.1007/s11846-020-00421-0
  5. Akhtar, T., Tareq, M. A., & Rashid, K. (2021b). The role of shareholders and creditors’ rights in affecting cash holdings and firm value: A recent evidence from ASEAN. International Journal of Finance & Economics. https://doi.org/10.1002/ijfe.245710.1002/ijfe.2457
  6. Akhtar, T., Tareq, M., Sakti, M., & Khan, A. (2018). Corporate governance and cash holdings: The way forward. Qualitative Research in Financial Markets, 10(2), 152‒170.10.1108/QRFM-04-2017-0034
  7. Al-Dhamari, R. A., & Ismail, N. I. K. (2014). An investigation into the effect of surplus free cash flow, corporate governance and firm size on earnings predictability. International Journal of Accounting and Information Management, 22(2), 118–133.10.1108/IJAIM-05-2013-0037
  8. Al-Najjar, B. (2015). The effect of governance mechanisms on small and medium-sized enterprise cash holdings: Evidence from the United Kingdom. Journal of Small Business Management, 53(2), 303‒320. https://doi.org/10.1111/jsbm.1206210.1111/jsbm.12062
  9. Al-Najjar, B., & Clark, E. (2017). Corporate governance and cash holdings in MENA: Evidence from internal and external governance practices. Research in International Business and Finance, 39, 1–12.10.1016/j.ribaf.2016.07.030
  10. Alatassi, B., & Letza, S. (2018). Best practice in bank corporate governance: The case of Islamic banks. Economics and Business Review, 4(4), 115‒133.10.18559/ebr.2018.4.7
  11. Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo Evidence and an application to employment equations. Review of Economic Studies, 58, 277‒297.10.2307/2297968
  12. Asian Development Bank. (1997). Asian Development Bank outlook 1997. Oxford, Hong Kong.
  13. Bahrami, H., & Evans, S. (1987). Stratocracy in high-technology firms. California Management Review, 30, 51–66.10.2307/41165266
  14. Bebchuk, L., & Weisbach, M. (2010). The state of corporate governance research. Review of Financial Studies, 23, 939‒961.10.1093/rfs/hhp121
  15. Bokpin, G., Isshaq, Z., Aboagye, & Otchere, F. (2011). Ownership structure, corporate governance and corporate liquidity policy. Journal of Financial Economic Policy, 3(3), 262–279.10.1108/17576381111152236
  16. Boubaker, S. (2007). Ownership–control discrepancy and firm value: evidence from France. Multinational Finance Journal, 11(3/4), 211–252.10.17578/11-3/4-3
  17. Boubaker, S., & Nguyen, D. K. (2015). Does the board of directors affect cash holdings? A study of French listed firms. Journal of Managerial Governance, 19, 341–370.10.1007/s10997-013-9261-x
  18. Caprio, L., Giudice, A., & Signori, A. (2019). Cash holdings in family firms: CEO identity and implications for firm value. European Financial Management, 26(2), 386-415.10.1111/eufm.12233
  19. Chahine, S., & Filatotchev, I. (2008). The effects of information disclosure and board independence on IPO discount. Journal of Small Business Management, 46(9), 219–241.10.1111/j.1540-627X.2008.00241.x
  20. Chava, S., & Roberts, M. (2008). How does financing impact investment? The role of debt covenants. The Journal of Finance, 63(5), 2085–2121.10.1111/j.1540-6261.2008.01391.x
  21. Chen, Y. R. (2008). Corporate governance and cash holdings: Listed new economy versus old economy firms. Corporate Governance: An International Review, 16(5), 430–442.10.1111/j.1467-8683.2008.00701.x
  22. Chen, Y. R., & Chuang, W. T. (2009). Alignment or entrenchment? Corporate governance and Cash Holdings in growing firms. Journal of Business Research, 62(11), 1200–1206.10.1016/j.jbusres.2008.06.004
  23. Chen, R., Guedhami, O., Yang, Y., & Zaynutdinova, G. R. (2020). Corporate governance and cash holdings: Evidence from worldwide board reforms. Journal of Corporate Finance, 65, 101771.10.1016/j.jcorpfin.2020.101771
  24. Christensen, J., Kent, P., & Stewart, J. (2010). Corporate governance and company performance in Australia. Australian Accounting Review, 20(4), 372–386.10.1111/j.1835-2561.2010.00108.x
  25. Ciftci, I., Tatoglu, E., Wood, G., Demirbagc, M., & Zaim, S. (2019). Corporate governance and firm performance in emerging markets: Evidence from Turkey. International Business Review, 28, 90–103.10.1016/j.ibusrev.2018.08.004
  26. Da Cruz, A. F., Kimura, H., & Sobreiro, A. (2019). What do we know about corporate cash holdings? A systematic analysis. Journal of Corporate Accounting and Finance, 30(1), 77–143.10.1002/jcaf.22368
  27. Dahya, J., Dimitrov, O., & McConnell, J. (2008). Dominant shareholders, corporate boards, and corporate value: A cross-country analysis. Journal of Financial Economics, 87, 73‒100.10.1016/j.jfineco.2006.10.005
  28. Dallas, G. (2004). Governance and risk: An analytical handbook for investors, managers, directors and stakeholders. New York: McGraw-Hill.
  29. Demsetz, H., & Villalonga, B. (2001). Ownership structure and corporate performance. Journal of Corporate Finance, 7(3), 209–233.10.1016/S0929-1199(01)00020-7
  30. Dittmar, A., & Mahrt-Smith, J. (2007). Corporate governance and the value of cash holdings. Journal of Financial Economics, 83(3), 599–634.10.1016/j.jfineco.2005.12.006
  31. Dittmar, A., Mahrt-Smith, J., & Servaes, H. (2003). International corporate governance and corporate cash holdings. The Journal of Financial and Quantitative Analysis, 38(1), 111‒133.10.2307/4126766
  32. Djankov, S., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2008). The law and economies of self-dealing. Journal of Financial Economics, 88, 430–465.10.1016/j.jfineco.2007.02.007
  33. Djankov, S., McLeish, C., & Shleifer, A. (2007). Private credit in 129 countries. Journal of Financial Economics, 84(2), 299–329.10.1016/j.jfineco.2006.03.004
  34. E-Vahdati, S., Zulkifli, N., & Zakaria, Z. (2018). Moderated mediation model for board diversity and corporate performance in ASEAN countries. Sustainability, 10(556), 1‒20.10.3390/su10020556
  35. Ehikioya, B. I. (2009). Corporate governance structure and firm performance in developing economies: Evidence from Nigeria. The International Journal of Business in Society, 9(3), 231–243.10.1108/14720700910964307
  36. Gompers, P. A., Metrick, A., & Ishii, J. L. (2003). Corporate governance and equity prices. The Quarterly Journal of Economics, 118(1), 107–155.10.1162/00335530360535162
  37. Harford, J., Mansi, S., & Maxwell, W. F. (2008). Corporate governance and firm cash holdings in the US. Journal of Financial Economics, 83(3), 535–555.10.1016/j.jfineco.2007.04.002
  38. He, L. (2008). Do founders matter? A study of executive compensation, governance structure and firm performance. Journal of Business Venturing, 23(3), 257‒279.10.1016/j.jbusvent.2007.02.001
  39. Hermalin, B. E., & Weisbach, M. S. (1991). The effects of board composition and direct incentives on firm performance. Financial Management, 20(1991), 101‒112.
  40. Iskandar-Datta, M., & Jia, Y. (2014). Agency conflict and corporate cash holdings around the world. Review of Quantitative Financial Accounting, 41, 1‒29.
  41. Jensen, M. (1986). Agency costs of free cash flow, corporate finance, and takeovers. American Economic Review, 76(2), 323–329.
  42. John, K., & Senbet, L. W. (1998). Corporate governance and board effectiveness. Journal of Banking and Finance, 22(4), 371‒403.10.1016/S0378-4266(98)00005-3
  43. Johari, N. H, Saleh, N. M., Jaafar, R., & Hassan, M. S. (2008). The influence of board independence, competency and ownership on earnings management in Malaysia. International Journal of Economics and Management, 2(2), 281‒306.
  44. Kahan, M., & Rock, E. B. (2003). Corporate constitutionalism: Antitakeover charter provisions as precommitment. University of Pennsylvania Law Review, 152(2), 472–522.10.2307/3313029
  45. Kalcheva, I., & Lins, K. V. (2007). International evidence on cash holdings and expected managerial agency problems. Review of Financial Studies, 20(4), 1087–1112.10.1093/rfs/hhm023
  46. Kim, K., Kitsabunnarat-Chatjuthamard, P., & Nofsinger, J. (2007). Large shareholders, board independence, and minority shareholder rights: Evidence from Europe. Journal of Corporate Finance, 13, 859‒880.10.1016/j.jcorpfin.2007.09.001
  47. Kusnadi, Y. (2003) Corporate cash holdings, board structure, and ownership concentration: Evidence from Singapore. (Working Paper, SSRN). Hong Kong University of Science and Technology.
  48. Kusnadi, Y. (2011). Do corporate governance mechanisms matter for cash holdings and firm value?. Pacific-Basin Finance Journal, 19(5), 554‒570.10.1016/j.pacfin.2011.04.002
  49. Kusnadi, Y. (2019). Political connections and the value of cash holdings. Finance Research Letters, 30, 96‒102.10.1016/j.frl.2019.03.035
  50. Kyröläinen, P., Tan, I., Karjalainen, P., (2013). How creditor rights affect the value of cash: Across-country study. Journal of Corporate Finance, 22, 278–298.10.1016/j.jcorpfin.2013.06.001
  51. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. (1998). Law and finance. Journal of Political Economy, 106(6), 1113‒1155.10.1086/250042
  52. Lee, K. W., & Lee, C. F. (2009). Cash holdings, corporate governance structure and firm valuation. Review of Pacific Basin Financial Markets and Policies, 12(3), 475‒508.10.1142/S021909150900171X
  53. Lim, L. K. (2011). Common currency in East Asia: An analysis of currency convergence. International Journal of Business Studies, 19(1), 53–67.
  54. Malkiel, B. G., & Fama, E. F. (1970). Efficient capital markets: A review of theory and empirical work. The Journal of Finance, 25(2), 383–417.10.1111/j.1540-6261.1970.tb00518.x
  55. McConnell, J., & Servaes, H. (1990). Additional evidence on equity ownership and firm value. Journal of Financial Economics, 27(1), 595–612.10.1016/0304-405X(90)90069-C
  56. Megginson, W. L., Barkat Ullah, & Wei, Z. (2014). State ownership, soft-budget constraints, and cash holdings-Evidence from China’s privatized firms. Journal of Banking and Finance, 48(1), 276–291.10.1016/j.jbankfin.2014.06.011
  57. Mehran, H., (1995). Executive compensation structure, ownership and firm performance. Journal of Financial Economics, 38, 163‒184.10.1016/0304-405X(94)00809-F
  58. Mei-Se, C., Chien-Chiang, L., Te-Chung, H., & Hui-Ting, H. (2015). Dynamic Asian stock market convergence: Evidence from dynamic cointegration analysis among China and ASEAN-5. Economic Modelling, 51, 84–98.10.1016/j.econmod.2015.06.024
  59. Morck, R., Shleifer, A., & Vishny, R. W. (1988). Management ownership and market valuation: An empirical analysis. Journal of Financial Economics, 20(1-2), 293–316.10.1016/0304-405X(88)90048-7
  60. Myers, S. C., & Rajan, R. G. (1998). The paradox of liquidity. The Quarterly Journal of Economics, 113(3), 733‒771.10.1162/003355398555739
  61. Nason, R., & Patel, P. (2016). Is cash king? Market performance and cash during a recession. Journal of Business Research, 69(10), 4242‒4248.10.1016/j.jbusres.2016.03.001
  62. Nini, G., Smith, D., & Sufi, A. (2009). Creditor control rights and firm investment policy. Journal of Financial Economics, 92(3), 400–420.10.1016/j.jfineco.2008.04.008
  63. North, D. (2005). Understanding the process of economic change. Princeton: Princeton University Press.10.1515/9781400829484
  64. Opler, T., Pinkowitz, L., Stulz, R., & Williamson, R. (1999). The determinants and implications of corporate cash holdings. Journal of Financial Economics, 52(1), 3–46.10.1016/S0304-405X(99)00003-3
  65. Ozelge, S., & Saunders, A. (2012). The role of lending banks in forced CEO turnovers. Journal of Money, Credit, and Banking, 44(4), 631–659.10.1111/j.1538-4616.2012.00504.x
  66. Ozkan, A., & Ozkan, N. (2004). Corporate cash holdings: An empirical investigation of UK companies. Journal of Banking and Finance, 28(9), 2103–2134.10.1016/j.jbankfin.2003.08.003
  67. Pinkowitz, L., Stulz, R., & Williamson, R. (2006). Does the contribution of corporate cash holdings and dividends to firm value depend on governance? A cross-country analysis. Journal of Finance, 61(6), 2725–2751.10.1111/j.1540-6261.2006.01003.x
  68. Podolski, E. J., Truong, C., & Veeraraghavan, M. (2016). Cash holdings and bond returns around takeovers. International Review of Financial Analysis, 46, 1‒11.10.1016/j.irfa.2016.04.002
  69. Rodriguez-Fernandez, M. (2016). Social responsibility and financial performance: The role of good corporate governance. Business Research Quarterly, 19(2), 137–151.10.1016/j.brq.2015.08.001
  70. Saha, R., & Kabra, K. C. (2019). Does corporate governance influence firm performance? Evidence from India. Economics and Business Review, 5(4), 70‒89.10.18559/ebr.2019.4.4
  71. Seifert, B., & Gonenc, H. (2016). Creditor rights, country governance, and corporate cash holdings. Journal of International Financial Management and Accounting, 27(1), 65‒90.10.1111/jifm.12033
  72. Tong, Z. (2010). CEO risk incentives and corporate cash holdings. Journal of Business Finance and Accounting, 37, 1248–1280.10.1111/j.1468-5957.2010.02208.x
  73. Wasiuzzaman, S. (2014). Analysis of corporate cash holdings of firms in Malaysia. Journal of Asia Business Studies, 8(2), 118–135.10.1108/JABS-10-2012-0048
  74. Wayne, M., & Partch, M. (2003). Do persistent large cash reserves hinder performance?. Journal of Financial and Quantitative Analysis, 38(2), 275‒294.10.2307/4126751
  75. White, J. W., & Ingrassia, P. (1992, April 7). Board ousts managers at GM takes control of crucial committee. The Wall Street Journal of Account and Economics, A1, A8.
  76. World Bank. (2003). Corporate governance: An issue of global concern. Washington, DC: World Bank.
  77. Yu, H., Sopranzetti, B., & Lee, C. (2015). The impact of banking relationships, managerial incentives, and board monitoring on corporate cash holdings: An emerging market perspective. Review of Quantitative Finance and Accounting, 44(2), 353–378.10.1007/s11156-013-0402-8
  78. Yung, K., & Nafar, N. (2014). Creditor rights and corporate cash holdings: International evidence. International Review of Economics and Finance, 33(3), 111–127.10.1016/j.iref.2014.03.011
DOI: https://doi.org/10.18559/ebr.2022.4.3 | Journal eISSN: 2450-0097 | Journal ISSN: 2392-1641
Language: English
Page range: 39 - 67
Submitted on: Jul 18, 2022
Accepted on: Sep 16, 2022
Published on: Jan 11, 2023
Published by: Poznań University of Economics and Business Press
In partnership with: Paradigm Publishing Services
Publication frequency: 4 issues per year

© 2023 Tahir Akhtar, published by Poznań University of Economics and Business Press
This work is licensed under the Creative Commons Attribution 4.0 License.