Do business groups affect corporate cash holdings? Evidence from a transition economy

Cai, Weihua; Zeng, Cheng; Lee, Edward; Ozkan, Neslihan

doi:10.1016/j.cjar.2015.10.002

Cited by 38 publications

(27 citation statements)

References 76 publications

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“…It also indicated that when an individual pattern of shareholding increases, then cash holding decreases and firms moves outward for financing as this study reveals the results of leverage. Rest, during the financial distress period they get the cash out from their diverted business line, or they generate the money from their source, and this study reported the same as agency theory stated (Cai, Zeng, Lee, & Ozkan, 2016). Table 2 also indicates the inverse relationship between institutional shareholding and cash holding, which means that cash holding decreases with the increase in the institutional pattern of shareholding.…”

Section: Discussionsupporting

confidence: 65%

Ownership Hierarchy and Cash Holding: A Study From Pakistan

Safdar

Tian²,

Tanchangya³

et al. 2019

IJFR

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This study aims to investigate the impact of the ownership hierarchy on the retention of cash. Ownership structure has dissimilar from each organization as some firms have surplus cash holdings and some firms have fewer cash holdings. This study examines the pattern of shareholding in Pakistan and its consequences on holding of cash. Trade-off theory, peaking-order theory, and agency theory have already hashed out the sensation between cash holding and ownership structure. Fixed Redundant likelihood test, Hausman Test and Panel Data Regression model are used to compute the final results. This study involves 74 non-financial firms to investigate the prime effects. The data have been taken from the biggest database of Karachi Stock Exchange (KSE) 100 index Pakistan and company financial reports from the period 2006 to 2017. Significant findings of this paper are based on two different research questions. First, how the pattern of shareholding has an impact on the decision of cash holding? Second, how the boundaries of the firm affect cash holding? These findings imply that cash holding and ownership structure are a vital element of the firm’s financial policy. This paper concludes that there is a negative and substantial relationship between cash holding and the pattern of shareholdings and the boundaries of the firm have an imperative effect on the holding of cash.

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Section: Discussionsupporting

confidence: 65%

Ownership Hierarchy and Cash Holding: A Study From Pakistan

Safdar

Tian²,

Tanchangya³

et al. 2019

IJFR

View full text Add to dashboard Cite

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“…In recent years, more literatures turned to the attributes of good corporate governance and their effect on the firm's operating performance. Cai, Zeng, Lee and Ozkan [15] found that the Chinese enterprises with group affiliation kept less cash holdings and thus improved the free-cash-flow problem of agency costs. Srivastav and Hagendorff [16] highlighted the need for shareholders, creditors, and the taxpayer in the internal governance mechanisms.…”

Section: Corporate Governancementioning

confidence: 99%

Share Centralization, Investor Sentiment and Firm Performance

Cheng¹

2019

IJBER

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The purpose of this paper is to identify how internal corporate governance and external investor sentiment impacts the operating performance of the firm. The corporate governance mechanism affects the firm's operating activities, and transfers its results to outside investors by public financial reports. Since the universal uninformed investors could only identify the firm's net income instead of accrual earnings, this paper reflects the "visible" accounting number to represent investors' received information differently from literatures. Sampling the Taiwanese listed companies from 2007 to 2014, I demonstrate variable definition, build regression models and examine them by full sample analysis and by grouping analysis. The results show three points contributed to professional and business field. The first is that both the higher investor sentiment and the larger shareholding percentage of the board are relevant to reported performance. In addition, because the investor sentiment is encouraged by firm's net income, the managers should devote to better earnings for borrowing equity capital when the firm's debt ratio is high. Finally, only in the situation that the enterprise faces low investor sentiment and little shareholding of the board is the shareholding percentage negative relationship to the operating performance. It infers that instead of informing the firm's prospect to the outside investors, the board might hold on its share right inside of the firm.

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“…As a result, hedging increases shareholder wealth because it reduces the expected amount of direct bankruptcy costs. Hedging can also be used to solve various problems related to cash flow, such as financial difficulties and underinvestment issues (Ayturk, Gurbuz, & Yanik, 2016;Cai, Zeng, Lee, & Ozkan, 2016). If Financial Distress increases, the use of hedging will increase.…”

Section: Table1mentioning

confidence: 99%

Panel Method in Hedging: Evidence from The Indonesian Agricultural Sector

Mubarok

Utami

2020

jda

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Hedging is a derivative instrument in the form of actions used to minimize risks due to fluctuations in foreign currencies, interest rates, and commodity prices. This study aims to analyze the factors that influence hedging in agricultural sector companies using the panel data method in the form of quarterly from 7 companies from 2013 to 2019. The study results show growth opportunity, financial distress, debt, leverage, firm size, liquidity, profitability, and dividend payout ratio significantly influence the use of hedging. This study's results indicate that agricultural sector companies as a whole use hedging to protect against future risk exposures. Besides, it is necessary to know the factors that influence making decisions using hedging. This study recommends that companies increase export productivity balanced with appropriate hedging policies to improve company performance.

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Do business groups affect corporate cash holdings? Evidence from a transition economy

Cited by 38 publications

References 76 publications

Ownership Hierarchy and Cash Holding: A Study From Pakistan

Ownership Hierarchy and Cash Holding: A Study From Pakistan

Share Centralization, Investor Sentiment and Firm Performance

Panel Method in Hedging: Evidence from The Indonesian Agricultural Sector

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