Does Institutional Investor Ownership Influence Corporate Cash Holding?

Jiang, Yi; Li, Hengrui; Yan, Li

doi:10.2991/assehr.k.211209.013

Cited by 3 publications

(2 citation statements)

References 19 publications

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“…Hypothesis 1: the value of cash holdings is higher in Shariah-compliant firm According to Jiang et al [20], their research shows that active institutional investors increase the level of cash holdings in companies. Previous studies have also demonstrated that institutional investors are better at utilizing current information and making more accurate predictions of future earnings compared to non-institutional investors [21].…”

Section: Hypothesesmentioning

confidence: 99%

The Value of Cash: Evidence from Indonesia Listed Firms

Tsai,

Lin,

Imamah

2024

KSS

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This study investigates the influence of Islamic law on the value of cash holdings. The empirical analysis was conducted using Indonesian-listed companies from 2012 to 2020 as the research sample. It is hypothesized that companies adhering to Islamic law will increase the value of cash holdings. Considering the ownership structure, it is hypothesized that higher ownership by institutions and corporate insiders in Islamic-compliant companies will lead to higher value of cash holdings. The empirical results of this study reveal that companies adhering to Islamic principles do indeed increase the value of cash holdings. Additionally, higher institutional and insider ownership in Islamic-compliant companies increase the value of cash holdings. The empirical implications of this study suggest that religious beliefs influence managerial decision-making, leading to more cautious control over cash. Both religion and ownership structure play important roles in the efficient use of cash by managers. Keywords: Islamic law, value of cash holdings, ownership structure

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Section: Hypothesesmentioning

confidence: 99%

The Value of Cash: Evidence from Indonesia Listed Firms

Tsai,

Lin,

Imamah

2024

KSS

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“…Because the ability to acquire debt may be used as a proxy for a firm's cash needs, high leverage results in a decline in corporate cash holdings. [27]. Based on a sample of Shenzhen and Shanghai exchange in 2007-2017, Jiang and Li point out that institutional investors can collect complete information and therefore their prudence may be higher.…”

Section: The Promotion Effectmentioning

confidence: 99%

Institutional Investor Shareholding and Corporate Cash Holding: A Literature Review

2022

2022 2nd International Conference on Management Science and Industrial Economy Development (MSIED 2022)

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The purpose of this article is to give a reference for relevant studies by focusing on the influence relationship between institutional investors' shareholdings and company cash holdings in recent years. This paper examines and summarizes relevant domestic and international literature to determine the factors that influence institutional investors' behavioral patterns in terms of corporate financial impact, firm performance, and innovation. The study of institutional investors' shareholding and company cash holdings based on internal management and external market government factors, as well as macro factors, determines that institutional investors' attitude has a significant influence on organizational financial impact, corporate performance, and innovation. It is determined that institutional investors' actions have a significant impact on businesses, and that reasonable and timely management will be beneficial, whereas excessive meddling will be detrimental.

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The nexus between female directors and corporate cash holdings: Evidence from Indonesia

Sutrisno,

Jaharuddin,

Asni Gani

et al. 2023

Investment Management and Financial Innovations

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In the last decade, gender diversity on boards or women in the boardroom has gained the attention of academics and practitioners. This paper aims to explore how women directors affect corporate cash holdings in Indonesia. This study utilizes data on Kompas 100 index firms for 2014–2021. A fixed-effect estimator is used to analyze data. The study reveals that female directors positively influence cash holdings. This finding remains robust when employing an alternative proxy for female directors and excluding observations during the COVID-19 period. Additionally, the findings indicate notable variations in cash holdings between companies with and without female directors. Regarding control variables, a firm’s cash holdings are negatively influenced by board size, leverage, company size, and net working capital. Firm profitability and growth opportunities positively influence cash holdings. This paper also documents that institutional ownership weakens the nexus between female directors and cash holding. The findings highlight that female directors hold higher amounts of cash because of their increased risk aversion. This study enriches the discussion on female directors and cash-holding levels in a developing country with a two-tiered board system. AcknowledgmentsThis study is not funded by any funding agency.

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Does Institutional Investor Ownership Influence Corporate Cash Holding?

Cited by 3 publications

References 19 publications

The Value of Cash: Evidence from Indonesia Listed Firms

The Value of Cash: Evidence from Indonesia Listed Firms

Institutional Investor Shareholding and Corporate Cash Holding: A Literature Review

The nexus between female directors and corporate cash holdings: Evidence from Indonesia

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