Investment Committee, Corporate Cash Holdings and Corporate Life Cycle

International Review of Finance, Forthcoming

Posted: 25 Oct 2018

See all articles by Ahmed Alhadi

Ahmed Alhadi

Curtin University - School of Accounting; Sultan Qaboos University - Accounting

Baban Eulaiwi

Curtin University - School of Accounting

Syed Mujahid Hussain

Independent

Khamis Al-Yahyaee

Sultan Qaboos University; Economic Research Forum

Date Written: October 2, 2018

Abstract

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

Suggested Citation

Alhadi, Ahmed and Eulaiwi, Baban and Hussain, Syed Mujahid and Al-Yahyaee, Khamis, Investment Committee, Corporate Cash Holdings and Corporate Life Cycle (October 2, 2018). International Review of Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3258987

Ahmed Alhadi (Contact Author)

Curtin University - School of Accounting ( email )

Australia

Sultan Qaboos University - Accounting ( email )

P.O. Box 20
PC 123
Muscat
Oman

Baban Eulaiwi

Curtin University - School of Accounting ( email )

Australia

Syed Mujahid Hussain

Independent

No Address Available

Khamis Al-Yahyaee

Sultan Qaboos University ( email )

P.O.Box 20
Al Khoudh, Muscat, 123
Oman
+(968)24141833 (Phone)
+(968)24414043 (Fax)

Economic Research Forum ( email )

21 Al-Sad Al-Aaly St.
(P.O. Box: 12311)
Dokki, Cairo
Egypt
+202 333 18 600 (Phone)

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