Excess Control Rights, Multiple Large Shareholders, and Corporate Cash Holding Behavior

Ramzi Benkraiem, Sabri Boubaker, Imen Derouiche and Emilios Galariotis
Additional contact information
Ramzi Benkraiem: Audencia Business School
Imen Derouiche: uni.lu - Université du Luxembourg = University of Luxembourg = Universität Luxemburg
Emilios Galariotis: Audencia Business School

Post-Print from HAL

Abstract: This article examines the effects of excess control rights of the controlling shareholder and the presence of multiple large shareholders on the propensity of firms to save cash out of cash flow, i.e. the sensitivity of cash to cash flow. Using a data set covering 6,430 firm–year observations of 634 French listed firms, the evidence shows that firms have high cash flow sensitivity of cash when the controlling shareholder‘s control rights exceed its cash-flow ownership. However, this sensitivity decreases with the contestability of the controlling owner‘s power. Taken together, these findings provide empirical support to the argument that firms experiencing excess control rights save more cash out of cash flow due to their considerable financial constraints that are lowered in the presence of high control contestability.

Date: 2023-05-17
References: Add references at CitEc
Citations:

Published in Finance, 2023, 44 (3), pp.47-108. ⟨10.3917/fina.pr.009⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Excess Control Rights, Multiple Large Shareholders, and Corporate Cash Holding Behavior (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04102447

DOI: 10.3917/fina.pr.009

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().