Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms
This study contributes to the literature by exploring the relationship between board financial expertise and cash holding policy and further showing how this relation is moderated by multiple large shareholders (MLS). This research is based on agency theory, resource dependence, trade-off, and pecki...
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| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
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Wiley
2021-01-01
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| Series: | Complexity |
| Online Access: | http://dx.doi.org/10.1155/2021/6397515 |
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| _version_ | 1832561436939780096 |
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| author | Wu MengYun Um-e-Habiba Muhammad Husnain Bushra Sarwar Waris Ali |
| author_facet | Wu MengYun Um-e-Habiba Muhammad Husnain Bushra Sarwar Waris Ali |
| author_sort | Wu MengYun |
| collection | DOAJ |
| description | This study contributes to the literature by exploring the relationship between board financial expertise and cash holding policy and further showing how this relation is moderated by multiple large shareholders (MLS). This research is based on agency theory, resource dependence, trade-off, and pecking order theory to confirm how resourceful directors screen cash holding practices. This study selects the 100 listed family firms from the emerging economy of Pakistan for the period of 2006–2017. With the use of static (random and fixed effect estimator) and dynamic (GMM) estimation techniques, this study reveals that the financial expertise of the board members has a significant negative impact on the firms’ cash holding level. Further, moderating effect of MLS between board financial expertise and cash holding is significantly positive due to weak corporate governance mechanisms in family firms. Moreover, the research has implications for developing corporate governance mechanism and the management of liquid assets that corporate management might use for their benefits. |
| format | Article |
| id | doaj-art-7a2ec353f8fb453695512aab7e8f4286 |
| institution | Kabale University |
| issn | 1076-2787 1099-0526 |
| language | English |
| publishDate | 2021-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Complexity |
| spelling | doaj-art-7a2ec353f8fb453695512aab7e8f42862025-02-03T01:24:59ZengWileyComplexity1076-27871099-05262021-01-01202110.1155/2021/63975156397515Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family FirmsWu MengYun0Um-e-Habiba1Muhammad Husnain2Bushra Sarwar3Waris Ali4School of Finance & Economics, Jiangsu University, Zhenjiang 212013, ChinaSchool of Finance & Economics, Jiangsu University, Zhenjiang 212013, ChinaDepartment of Business Administration, University of Sahiwal, Sahiwal 57000, PakistanSchool of Management Sciences, Ghulam Ishaq Khan Institute of Engineering Sciences and Technology (GIKI), Swabi, PakistanDepartment of Business Administration, University of Sahiwal, Sahiwal 57000, PakistanThis study contributes to the literature by exploring the relationship between board financial expertise and cash holding policy and further showing how this relation is moderated by multiple large shareholders (MLS). This research is based on agency theory, resource dependence, trade-off, and pecking order theory to confirm how resourceful directors screen cash holding practices. This study selects the 100 listed family firms from the emerging economy of Pakistan for the period of 2006–2017. With the use of static (random and fixed effect estimator) and dynamic (GMM) estimation techniques, this study reveals that the financial expertise of the board members has a significant negative impact on the firms’ cash holding level. Further, moderating effect of MLS between board financial expertise and cash holding is significantly positive due to weak corporate governance mechanisms in family firms. Moreover, the research has implications for developing corporate governance mechanism and the management of liquid assets that corporate management might use for their benefits.http://dx.doi.org/10.1155/2021/6397515 |
| spellingShingle | Wu MengYun Um-e-Habiba Muhammad Husnain Bushra Sarwar Waris Ali Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms Complexity |
| title | Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms |
| title_full | Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms |
| title_fullStr | Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms |
| title_full_unstemmed | Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms |
| title_short | Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms |
| title_sort | board financial expertise and corporate cash holdings moderating role of multiple large shareholders in emerging family firms |
| url | http://dx.doi.org/10.1155/2021/6397515 |
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