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Effects of Excess Cash, Board Attributes and Insider Ownership on Firm Value: Evidence from Pakistan

파키스탄 국외연구자료 기타 Nadeem Ahmed Sheikh, Muhammad Imran Khan Australasian Accounting, Business and Finance Journal 발간일 : 2016-11-05 등록일 : 2016-11-05 원문링크

The purpose of this paper is to investigate whether excess cash, board attributes (i.e. board size, board independence and CEO duality) and insider ownership affects the value of the firm. Data were taken from annual reports of non-financial firms listed on the Karachi Stock Exchange (KSE) Pakistan during 2008-2012. Pooled ordinary least squares method used to estimate the effects of excess cash and internal governance indicators on the value of the firm. Our results indicate that excess cash is significantly negatively related to firm value. Excess cash along with board size is significant and negatively related to firm value. Excess cash along with insider ownership is significant and negatively related to firm value. Control variables namely leverage and dividends are positively while firm size is negatively related to firm value in all regressions. In sum, empirical results indicate that excess cash, board size and insider ownership have material effects on the value of the firm. Moreover, findings of this study provide support to managers to understand the impact of excess cash and internal governance measures on firm value. In addition, findings provide support to regulatory authorities to frame regulations that improve the level of corporate governance in the country.

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