Corporate governance and cash holdings in MENA: Evidence from internal and external governance practices

Al-Najjar, Basil and Clark, Ephraim (2017) Corporate governance and cash holdings in MENA: Evidence from internal and external governance practices. Research in International Business and Finance, 39. pp. 1-12. ISSN 0275-5319

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Official URL: https://doi.org/10.1016/j.ribaf.2016.07.030

Abstract

This paper explores the impact of internal and external corporate governance practices on the decision to hold cash in MENA countries. Using430 non-financial firms in the MENA region for the period from 2000 to 2009, we find that both types of governance practices are important. We report a negative relationship between board size and cash holdings, evidence that firms hold less cash to reduce agency conflicts. Also, we detect that external governance activities are important in cash holding decisions, since we report that firms belonging to countries with international standards of securities law and bank supervision hold less cash. For our sub-sample of 85 firms, we report evidence that institutional owners are seen to be self-opportunistic and that they aim to maximize their own private benefits.

Item Type: Article
Uncontrolled Keywords: External governance, Board size, Board independence, Institutional ownership, MENA, Cash holdings
Subjects: N100 Business studies
N200 Management studies
N300 Finance
Department: Faculties > Business and Law > Newcastle Business School
Depositing User: Elena Carlaw
Date Deposited: 27 Apr 2021 15:59
Last Modified: 27 Apr 2021 16:00
URI: http://nrl.northumbria.ac.uk/id/eprint/46037

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