Corporate governance and cash holdings: Family versus non-family controlled firms

Rauf Gul, Sabeeh Ullah, Ajid Ur Rehman, Shahzad Hussain, Mehtab Alam, Collins G. Ntim
2020 Cogent Business & Management  
We examine the impact of corporate governance on cash holdings and the interplay of family ownership on this relationship through static and dynamic panel estimation models. Composite indicator for the corporate governance based on several proxies related to corporate board structure and ownership is constructed using principal component analysis (PCA). Our evidence is based on a sample of 120 publicly listed non-financial firms from Pakistan Stock Exchange (PSX) over the period 2013-2017. The
more » ... iod 2013-2017. The selected sample is further divided into family and non-family firms based on 10% or more ownership. We document the negative impact of corporate governance on cash holdings. The findings reveal that family ownership as a moderator weakens the impact of corporate governance mechanism on cash holdings. The analysis of individual proxies of corporate governance and cash holdings in the whole sample, as well as sub-sample, provides some new insights that family firms with more board size, board independence, and Rauf Gul
doi:10.1080/23311975.2020.1854562 fatcat:agsca7vrnrbihnusailglkdr24