1. Effect of Corporate Governance on Cash Management in Family-Oriented Firms.
- Author
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Shah, Idrees Ali, Niazi, Muhammad Abdullah Khan, Nouman, Muhammad, and Siddiqi, Muhammad Fahad
- Subjects
CASH management ,CORPORATE governance ,PORTFOLIO diversification ,BUSINESS enterprises ,FAMILY-owned business enterprises - Abstract
This research shows the link of corporate governance (CG) with diverse facets of cash management in family-oriented firms. Panel model is utilized for the year 2009 to 2021. The research depicts that level of cash holding is negatively affected due to CG. The finding of the study is supported by flexibility hypothesis to protect their selves from external monitoring mangers hold more cash due to agency conflict. The result further shows positive relationship of CG with "value of cash holding" in family-oriented firms and has 0.192 extra marginal values for one rupee extra investment in family-oriented firms under good governance compared to non-family-oriented firms. The research further postulates that proper governance decreases spending of excess cash (ECash) on internal investment and corporate diversification in family-oriented firms. Alternatively, good-governed family-oriented firms increase spending of ECash on dividend compared to rival firms. ECash under good governance positively affects performance indicates family-oriented firms having better CG uses ECash efficiently. [ABSTRACT FROM AUTHOR]
- Published
- 2023
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