Investment Committee, Corporate Cash Holdings and Corporate Life Cycle
International Review of Finance, Forthcoming
Posted: 25 Oct 2018
Date Written: October 2, 2018
We investigate the association between voluntary formation of a board investment committee (IC) and corporate cash holdings firms over the life cycle for a large sample of Gulf Cooperation Council (GCC) firms over the 2005–2013 period. We find that IC increases the corporate cash holdings in growth and maturity stages of firm, compared to introduction/old (decline) stages. This suggests that firm’s life stage would manifest integral complementarities among governance, investment strategy and corporate decision making methods; that corporate complexity would cause each stage to exhibit certain significant differences from all other stages. These results have important implications for policy makers and regulators. Our findings are robust to various econometric specifications.
Keywords: Investment committee, corporate life cycle, cash holdings and GCC
JEL Classification: G30, M41, G38
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