Open AccessCorporate Governance and Cash Holdings: Empirical Evidence from an Emerging Country, Sri Lanka
Author(s) -
A. Ajanthan,
Kga Udhaya Kumara
Publication year - 2017
Publication title -
international journal of accounting and financial reporting
Language(s) - English
Resource type - Journals
ISSN - 2162-3082
DOI - 10.5296/ijafr.v7i2.12137
Subject(s) - corporate governance , business , accounting , cash , cash management , diversity (politics) , gender diversity , empirical evidence , independence (probability theory) , operating cash flow , sri lanka , cash flow forecasting , cash flow , finance , economics , socioeconomics , philosophy , statistics , mathematics , epistemology , sociology , anthropology , tanzania
This study examines the influence of corporate governance practices on cash holdings of Sri Lankan listed companies. It develops hypotheses about the relationship between cash holding and corporate governance practices such as size, frequency of meetings, independence, independent chair and gender diversity. Using multiple regression analysis on data collected from the corporate annual reports of 90 listed companies, the study finds that corporate governance practices such as board size and gender diversity have a significant negative influence on cash holdings as well as independent chair has a significant positive influence on cash holdings. However, there is no evidence that board meetings affect cash holding in Sri Lankan companies. The study contributes to the literature on the factors that make variation in the amount of cash holding of the listed company and it may be useful for financial managers, business analyst, financial controller, operations managers, investors, financial management consultants and other stakeholders.