Alignment or Entrenchment? Evidence From Cash Holdings in Thailand

Afro-Asian Journal of Finance and Accounting, Vol. 9, No. 3, 2019

26 Pages Posted: 15 Jul 2019

See all articles by Yordying Thanatawee

Yordying Thanatawee

Burapha University - Graduate School of Commerce

Date Written: July 8, 2017

Abstract

This paper examines the relationship between managerial ownership and cash holdings of non-financial firms in Thailand over the period 2011 to 2015. The results indicate that higher managerial ownership is associated with lower cash holdings, suggesting that managers of Thai firms do not hoard cash for taking private benefits. The findings therefore lend support to the incentive-alignment hypothesis. In addition, the evidence indicates that board size has a negative impact on cash holdings while board independence does not play a significant role. Further, it is found that profitability, firm size, growth opportunities and cash flow have positive effects on cash holdings whereas leverage has a nonlinear impact on cash reserves.

Keywords: cash holdings, managerial ownership, board size, board independence, corporate governance

JEL Classification: G32

Suggested Citation

Thanatawee, Yordying, Alignment or Entrenchment? Evidence From Cash Holdings in Thailand (July 8, 2017). Afro-Asian Journal of Finance and Accounting, Vol. 9, No. 3, 2019, Available at SSRN: https://ssrn.com/abstract=3419405

Yordying Thanatawee (Contact Author)

Burapha University - Graduate School of Commerce ( email )

169 Longhadbangsaen Road
T.Sansuk
Maung, Chonburi 20131
Thailand

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