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Communication Dans Un Congrès Année : 2007

Cash holdings, corporate governance and financial constraints

Edith Ginglinger
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  • PersonId : 838828
Khaoula Saddour
  • Fonction : Auteur
  • PersonId : 840454

Résumé

We examine the relation between cash holdings, quality of governance and financial constraints. We find that firms with strong shareholder rights hold more cash, contrary to the predictions of agency theory. This result is partly due to the positive correlation that exists between governance quality measures and the degree of financial constraint faced by the firm. We show that governance quality has no impact on cash holdings by financially unconstrained firms. It does, however, have a positive impact on the cash holdings of certain financially constrained firms, particularly family firms. Anti-takeover provisions give these firms extra flexibility, enabling them to issue shares without the founding family losing control, and provide an alternative to high cash holdings.
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Dates et versions

halshs-00162411 , version 1 (13-07-2007)

Identifiants

  • HAL Id : halshs-00162411 , version 1

Citer

Edith Ginglinger, Khaoula Saddour. Cash holdings, corporate governance and financial constraints. European Financial Management Association, 2007, Vienna, Austria. pp.1-33. ⟨halshs-00162411⟩
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