Investigating the relationship between corporate governance mechanism and cash holding

Document Type : Research Paper

Authors

1 Associate Prof., Payam Noor University, Tehran, Iran

2 MSc., Faculty of Economics, University of Mazandaran, Mazandaran, Iran

3 MSc., Payam Noor University, Tehran, Iran

Abstract

This study aims to investigate the relationship between corporate governance mechanism and firm cash holding using a sample of firms listed in Tehran stock exchange over the period 2007 to 2013. The role of corporate governance is guide and control the firm in reducing agency conflict between management and shareholders. An example of deviation of the shareholders' interests is an inappropriate management of cash resources.  In this research, we used debt reliance, chief executive officer tenure, ownership concentration, chief executive officer duality, board independent and institutional ownership for evaluating corporate governance.  The research hypothesis is tested using panel data regression model. Our result indicates a negative significant relationship between the institutional ownership, board independent and debt reliance with cash holding. Also our findings show no significant relationship between ownership concentration, chief executive officer duality and chief executive officer tenure with cash holding.

Keywords

References

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