The effects of country and firm-level governance on cash management
Bruce Seifert and
Journal of International Financial Markets, Institutions and Money, 2018, vol. 52, issue C, 1-16
We examine the effects of both country and firm-level governance on cash holdings and the value of cash for a large international sample during the period 2002–2013. We find that both strong country and strong firm-level governance reduce the amount of cash holdings. We observe that a number of the components of both firm and country-level governance are significantly related to the decrease in cash holdings. We show that the value of cash increases as a result of good country-level governance and we provide mixed evidence that good firm-level governance also increases the value of cash. Our analysis also confirms that the payment of dividends adds to the value of cash.
Keywords: Cash holdings; Value of cash; Corporate governance; Country governance; Dividend policy; Firm value (search for similar items in EconPapers)
JEL-codes: G32 G34 G35 G38 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:52:y:2018:i:c:p:1-16
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