Directorate interlocks and corporate cash holdings in emerging economies: Evidence from China

Li, Xiaoqing; Fung, Anna; Fung, Hung‐Gay; Qiao, Penghao

doi:10.1016/j.iref.2019.12.002

Cited by 21 publications

(11 citation statements)

References 56 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The coefficients on cash holding and growth opportunities are still significant at the 1% level and have negative signs in all countries, same as the single‐equation results. These findings are similar to the results of existing studies on cash holdings (Brick & Liao, 2016) and growth opportunities (Barclay et al, 2003; Billett et al, 2007; Dang, 2011; Elyasiani et al, 2002; Johnson, 2003; Li et al, 2020). However, in contrast to the single‐equation result, the coefficient on the interaction term between growth opportunities and debt maturity (the proportion of long‐term debt) in all countries exhibits the positive sign.…”

Section: Resultssupporting

confidence: 90%

Empirical analysis of debt maturity, cash holdings and firm investment in developing economies

Nnadi

Surichamorn²,

Jayasekera

et al. 2021

Int. J Fin Econ

View full text Add to dashboard Cite

This study investigates the potential simultaneous relationships among leverage, debt maturity and cash holdings and how these jointly affect financial policy and firms' investment activities in developing countries of Thailand, Indonesia and Singapore during the period 2006–2015. Using the two‐step system GMM estimator, our results show that high‐growth firms not only shorten debt maturity to reduce the underinvestment incentive, but also decrease leverage to reduce liquidity risk. We find evidence that the level of cash holdings is a key determinant of leverage in all countries and that debt policy and growth opportunities affect the investment decision of firms in Thailand and Singapore whereas cash policy is more important in Indonesia. These findings have significant implications for investment decisions in these economies.

show abstract

Section: Resultssupporting

confidence: 90%

Empirical analysis of debt maturity, cash holdings and firm investment in developing economies

Nnadi

Surichamorn²,

Jayasekera

et al. 2021

Int. J Fin Econ

View full text Add to dashboard Cite

show abstract

Section: Review Of Related Literaturementioning

confidence: 99%

“…Some studies identified corruption, country peculiarities and firm characteristics as the predictors of cash holding (Tran, 2019; and Li et al , 2020). Specifically, Thakur and Kannadhasan (2019) found corruption and low investor protection, while Li et al (2020) identified interlocking directorship in network centrality (political connection) and structural holes as the determinants of corporate cash holding. Loncan (2018) examined corporate cash holding policy in 23 emerging economies and found financial constraints as a predictor, while the presence of foreign institutional ownership has a negative effect on cash holding.…”

Section: Review Of Related Literaturementioning

confidence: 99%

Effect of financial technology on cash holding in Nigeria

Onah

Ujunwa

et al. 2021

AJEMS

View full text Add to dashboard Cite

PurposeThis paper aims to examine the effect of financial technology on cash holding in Nigeria.Design/methodology/approachThe authors use Pesaran et al.’s (2001) autoregressive distributed lag (ARDL) bounds test approach to cointegration to estimate the long-run relationship between four direct measures of financial technology (automated teller machine [ATM], Internet banking [IB], point of sale [POS] and mobile banking [MB]) and cash holding.FindingsThe authors find the presence of long-run negative relationship between cash holding and the four direct measures of financial technology.Practical implicationsDespite the negative effect of financial technology on cash holding, the descriptive results highlight increasing trajectory in cash holding. This suggests that structural factors such as ethical climate, literacy level, household characteristics, currency denomination structures, economic uncertainty and infrastructure deficit may account for the pervasive cash transactions in Nigeria and not necessarily the unwillingness of economic agents to use digital platform for financial transactions.Originality/valueThis study contributes to existing literature by augmenting the money demand function to accommodate direct measures of financial technology in examining the effectiveness of the policy on cash holding in Nigeria.

show abstract

“…Cash holding not only is a subject of increasing interest in political and academic discussions but also is essential for the ordinary investor because of comprehensive media reports regarding several global firm's cash holding practices such as Google, Apple, and Microsoft [11][12][13][14]. A recent study by da Cruz et al [15] finds the upward trend in cash holding around the globe; therefore, corporate cash holding is a vital phenomenon in the corporate setting nowadays.…”

Section: Introductionmentioning

confidence: 99%

“…e study investigates the board financial expertise's impact on corporate cash holding, which is motivated by two reasons. First, comprehensive media reports about several firm's cash holding practices like Google, Apple, and Microsoft [12,14], along with renowned corporate scandals like HealthSouth, Enron, WorldCom, and Tyco [38,39], have shifted the attention of regulators and market makers to have financial expertise on board for effective corporate governance mechanisms.…”

Section: Introductionmentioning

confidence: 99%

Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms

Um-e-Habiba

Husnain³

et al. 2021

Complexity

View full text Add to dashboard Cite

This study contributes to the literature by exploring the relationship between board financial expertise and cash holding policy and further showing how this relation is moderated by multiple large shareholders (MLS). This research is based on agency theory, resource dependence, trade-off, and pecking order theory to confirm how resourceful directors screen cash holding practices. This study selects the 100 listed family firms from the emerging economy of Pakistan for the period of 2006–2017. With the use of static (random and fixed effect estimator) and dynamic (GMM) estimation techniques, this study reveals that the financial expertise of the board members has a significant negative impact on the firms’ cash holding level. Further, moderating effect of MLS between board financial expertise and cash holding is significantly positive due to weak corporate governance mechanisms in family firms. Moreover, the research has implications for developing corporate governance mechanism and the management of liquid assets that corporate management might use for their benefits.

show abstract

Directorate interlocks and corporate cash holdings in emerging economies: Evidence from China

Cited by 21 publications

References 56 publications

Empirical analysis of debt maturity, cash holdings and firm investment in developing economies

Empirical analysis of debt maturity, cash holdings and firm investment in developing economies

Effect of financial technology on cash holding in Nigeria

Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms

Contact Info

Product

Resources

About