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Author
Akhtar Tahir (University of Ha'il, Saudi Arabia)
Title
Corporate Governance, Excess-Cash and Firm Value: Evidence from ASEAN-5
Source
Economics and Business Review, 2022, vol. 8 (22), nr 4, s. 39-67, tab., bibliogr. 78 poz.
Keyword
Ład korporacyjny, Zarządzanie gotówką, Wartość przedsiębiorstwa, Zarządzanie finansami
Corporate governance, Cash management, Enterprise value, Financial management
Note
JEL Classification: N6, O16, C1, C3
summ.
Country
Kraje ASEAN
ASEAN countries
Abstract
This study investigates the role of the country- and firm-level governance practices on the relationship between excess-cash and firm value in ASEAN-5 markets. Using the Generalized Method of Moment models and a sample of 578 firms from 2010 to 2020 the study finds that excess-cash reduces firm value, indicating high agency costs and low firm value. However, excess-cash motivated by managerial ownership, founder CEO, board independence, shareholder rights and creditor rights increase firm value while excess-cash due to managerial entrenchment and CEODuality reduce firm value. In the sub-sample analyses the study finds that entrenched managers and board size play a less effective role in wasting excess-cash in low-excess-cash firms while independent directors play a higher monitoring role in high-excess-cash firms. In addition, governance at the country-level is more effective than at the firm-level in improving the value of excess-cash in large firms. The study offers unique evidence on the relationship between excess-cash and firm value by integrating corporate governance practices at the firm- and country-levels. The research aids practitioners, academics, policymakers and investors in developing the best liquidity policies to enhance business performance. (original abstract)
Accessibility
The Main Library of the Cracow University of Economics
The Library of Warsaw School of Economics
The Library of University of Economics in Katowice
The Main Library of Poznań University of Economics and Business
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ISSN
2392-1641
Language
eng
URI / DOI
http://dx.doi.org/10.18559/ebr.2022.4.3
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