Manuscript Type: Empirical Research Question/Issue: This study examines the impact of corporate governance on the cash-holding policies of firms with different investment opportunities. It is difficult to determine the optimal level of cash holdings for "listed new economy" firms (firms in the computer, software, Internet, telecommunications, or networking industries), which require large amounts of capital for investment opportunities with high return potential. Unlike in "old economy" firms, for which investment opportunities are relatively limited, corporate governance in listed new economy firms may create shareholder protections that make investors willing to accept higher levels of corporate cash holdings. Research Findings/Results: By examining American Standard and Poor 1,500 companies, the evidence shows that CEO ownership and board independence affect the cash holdings in listed new economy and old economy firms differently. Specifically, higher managerial cash holdings tend to reduce cash holdings in old economy firms and higher board independence tend to increase cash holdings in listed new economy firms. Theoretical Implications: This study provides empirical support for the association between agency theory and cash theories. Given different firm characteristics, the impact of corporate governance on cash holdings verifies the implication of agency theory in explaining corporate cash policy. Practical Implications: While firms in new economy industries may be eager for more flexible governance codes in order to maintain the freedom of decision making, the evidence from this study suggests that establishing effective governance mechanisms may, in turn, effectively enlarge the degree of freedom for these firms to make timely business decisions.

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Manuscript Type: EmpiricalResearch Question/Issue: This study distinguishes between the effects of financial constraint determinants on cross-border mergers and acquisitions (M&As) and domestic M&As for all takeover bids announced in nine East Asian economies from 1998 to 2005. Research Findings/Insights: The results of logistic regressions verify that the extent of stock market and governance developments improves corporate financing conditions and subsequently encourages cross-border M&As in East Asia. The results also indicate that, except for ownership control variables, the firm-specific factors of financing constraints reduce the occurrence of cross-border M&As relative to domestic M&As. Although family-and state-controlled firms have better access to external financing, they are reluctant to risk diluting their management control and thus prefer domestic M&As to cross-border deals. Theoretical/Academic Implications: This study enhances the empirical studies of the relation between financing constraints and corporate investments based on the market imperfection hypothesis of corporate finance theories. In addition, this study also addresses the interaction between the market imperfection hypothesis and agency theory in explaining the effects of special ownership control on cross-border M&As relative to domestic deals. Furthermore, by examining the research questions across nine East Asian economies, this study provides an understanding of how such a relation applies to firms in countries where information asymmetry is high. Practitioner/Policy Implications: The findings indicate the importance of corporate governance and verify the effects of unique organizational structures on major corporate decisions. Specifically, family-controlled firms are often free of the financing constraints inherent in investment decisions. Thus, it is necessary to consider such organizational uniqueness when explaining the financing behavior of cross-border M&As conducted by Asian firms.

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