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Economic Cycle, Uncertainty of Economic Policy and Cash Holding of Listed Companies  [PDF]
Qianqian Wang
Modern Economy (ME) , 2019, DOI: 10.4236/me.2019.101019

Based on the systematic review and economic analysis of the theoretical literature, we consider not only the impact of the economic cycle or the economic policy uncertainty (EPU) on the cash holding ratio, but also the comprehensive impact of the two on the cash holding rate. We raise the research hypothesis by using the data from 2004-2015 in the A-share listed companies which are listed in Shanghai and Shenzhen securities exchange as research samples. The empirical results show that: 1) There are respectively negative correlation between the economic cycle and the cash holding of listed companies, and positive correlation between the EPU and the cash holding. 2) During the boom, the cash holdings are significantly positive with the current EPU and the last stage; during the recession, the cash holdings of listed companies is significantly negatively correlated with the current EPU, while positive with the last stage. 3) We further examine the role of the economic cycle and the EPU on the cash holding value, and find that EPU will reduce the cash holding value. 4) When the economy is booming, the increase in EPU will reduce the market value of corporate cash holdings, but it is not significant. During recession, the increase in EPU will increase the market value of cash holdings.

Financial Characteristics, Corporate Governance and the Propensity to Pay Cash Dividends of Chinese Listed Companies  [cached]
Litai CHEN,Chuan LIN,Yong-cheol Kim
International Business and Management , 2011, DOI: 10.3968/j.ibm.1923842820110301.1z0653
Abstract: Employing 1056 A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2001 to 2007, we analyse empirically the influence of financial characteristics and corporate governance on propensity to pay cash dividends of companies. The result shows that in the related indexes of the financial characteristics of companies, the company size, cash flow, asset liquidity, profitability as well as whether cash dividends are paid in the previous year are positively correlated with propensity to pay cash dividends of companies. Investment opportunity and debt ratio are negatively correlated with the propensity to pay cash dividends of companies. Growth has uncertain influence on the propensity to pay cash dividends. In the corporate governance characteristics, existence of controlling shareholders, stateowned shareholder as the largest shareholder, the size of the board of directors, top-management compensation and listing factors in other markets are positively correlated with the propensity to pay cash dividends of companies. Tradable share ratio and CEO duality factor are negatively correlated with the propensity to pay cash dividends of companies. Independent director factor has uncertain influence on the propensity to pay cash dividends of companies. In general, financial characteristics shows that Chinese listed companies have the capability to pay cash dividends, but the corporate governance factors have negative influence on the cash dividend payment of listed companies.Key words: The propensity to pay cash dividends; The company factor; Financial characteristics; Corporate governance
Does Corporate Tax Avoidance Influence Firm Leverage of Vietnamese Listed Companies?  [PDF]
Hoang Thi Mai Khanh, Nguyen Vinh Khuong
Theoretical Economics Letters (TEL) , 2019, DOI: 10.4236/tel.2019.94069
Abstract: Corporate tax avoidance is defined by reducing taxes for any particular purpose, extending from the gracious remission of taxes expense arising from inconsistent customs for financial statements. In this paper, we examine the association between corporate tax avoidance and firm leverage. The trade-off theory is significant for explaining the relationship between tax avoidance behaviour and firm leverage. Consequently, the company directs to allow tax avoidance behaviour and accept the company’s leverage at a higher level than usual. The consequences commence to transaction costs, financial risks when viewing at company health from financial statements, but will maintain the company achieves the expected tax rates. We utilize STATA to test GMM on a sample of Vietnam listed firms data over the period 2010-2016. The sample data of 125 companies in the period from 2010 to 2016, all 875 observations were used for the analysis. The results show that there is a significant positive relationship between corporate tax avoidance on firm leverage in Vietnam. The research is essential to the regulator in controlling tax costs for companies, for investors in analyzing a corporate financial situation.
Younes Badavar Nahandi,Saeid Jabbarzadeh Kangarloei,Behzad Soleimani
Business and Management Review , 2011,
Abstract: The present study aims at identifying determinants of corporate cash holdings policy in companies listed in Tehran stock exchange. It has taken as its independent variables the firm size, leverage, growth opportunities, sales growth, liquid asset substitutes, capital expenditures, cash flow from operation, information asymmetry, free float, outside directors, and amount of dividends. The study is done in a period of seven years from 2003 to 2009 and has employed a library method in collecting information. A multiple regression model is also used fortesting of assumptions. Results of the study indicate that leverage, growth opportunities, cash flow from operation, outside directors and amount of dividends variables affect the level of corporate cash holdings of companies listed at Tehran stock exchange.
Ownership Structure and Cash Flows As Determinants of Corporate Dividend Policy in Pakistan  [cached]
Talat Afza,Hammad Hassan Mirza
International Business Research , 2010, DOI: 10.5539/ibr.v3n3p210
Abstract: Dividend Policy is among the widely addressed topics in modern financial literature. The inconclusiveness of the theories on importance of dividend in determining firm’s value has made it one of the most debatable topics for the researchers (see for example, Ramcharan, 2001; Frankfurter et. al 2002; Al-Malkawi, 2007). The present study investigates the impact of firm specific characteristics on corporate dividend behavior in emerging economy of Pakistan. Three years data (2005-2007) of 100 companies listed at Karachi Stock Exchange (KSE) has been analyzed using Ordinary Least Square (OLS) regression. The results show that managerial and individual ownership, cash flow sensitivity, size and leverage are negatively whereas, operating cash-flow and profitability are positively related to cash dividend. Managerial ownership, individual ownership, operating cash flow and size are the most significant determinants of dividend behavior whereas, leverage and cash flow sensitivity do not contribute significantly in determining the level of corporate dividend payment in the firms studied in our sample. Estimated results are robust to alternative proxy of dividend behavior i.e. dividend intensity.
An Empirical Investigation of the Relationship between Corporate Governance Mechanisms, CEO Characteristics and Listed Companies’ Performance  [cached]
Georgeta Vintila,Stefan Cristian Gherghina
International Business Research , 2012, DOI: 10.5539/ibr.v5n10p175
Abstract: This paper examines the impact of corporate governance mechanisms and CEO characteristics on U.S. listed companies’ performance. The corporate governance mechanisms are: shareholdings of insiders, shareholdings of the institutional investors and mutual funds, board size and the number of independent directors in the board. We used as performance measures the following: Tobin’s Q, return on assets, return on equity, price to book value and price earnings ratio. Additionally, we considered the impact of CEOs characteristics on companies’ performance. These characteristics are: CEO status regarding the possibility of holding multiple functions, the CEO’s possibility of being the founder of the company that he manages, state of residence, age and tenure in CEO position. Also we controlled for firm size, firm age and gearing. Our findings suggest mixed results between corporate governance and firm performance.
A Literature Review on the Cash Holding Issues  [PDF]
Yulu Ye
Modern Economy (ME) , 2018, DOI: 10.4236/me.2018.96068

Corporate cash holding decisions are one of the most important corporate financial decisions. Relevant research has received extensive attention from scholars at home and abroad and has formed rich research results. Starting from the motivation of cash holding, this paper combs and reviews the perspectives of the factors affecting cash holding, and puts forward the issues that we should pay attention to this field.

Countercyclical Markup Changes Research in Different Corporate Cash Holding Levels An Empirical Research Based on China Manufacturing Industry and Its Sub sectors

- , 2016,
Abstract: 采用中国A股制造业上市公司1998~2011年数据,探讨制造业全行业及其细分行业下反经济周期相对价格变动现象的存在;并引入现金持有这一财务资源,比较在不同现金持有水平下企业产品市场反经济周期相对价格变动的差异。研究发现反经济周期相对价格变动现象在中国制造业中存在,而现金持有较少的企业其反经济周期相对价格变动现象更为明显。同时在不同制造业细分行业中,反经济周期相对价格变动程度有所差异,现金持有的影响也发生变化。
Using the data of listed manufacturing companies in China A share markets from 1998 to 2011, We first establish a regression model to explore the relationship between economic cycles and markup changes in China as special economic entity. Then we compare the markup change in different cash holding levels and further add economic conditions to make a comparison. The research finds that countercyclical markup changes exist in China business and the more cash holdings enterprises reserve, the more relative prices decline they will have. Namely, cash holdings have negative effect on corporate markup changes. In times of economic recession, this negative effect will be increased.
Corporate governance, innovation investment and firm performance: evidence from Malaysian public listed companies  [PDF]
Norlizan MAT RABI,Abdul Hadi ZULKAFLI,Mohd Hassan CHE HAAT
Economia : Seria Management , 2010,
Abstract: Increasing attention is given in monitoring the management team by the shareholders through corporate governance mechanism. This is to ensure that every strategic business decisions maximize shareholders’ wealth. Unlike previous studies which identified a direct relationship between corporate governance mechanism and performance, this study is conducted to examine the moderating impact of the corporate governance mechanism on the relationship between innovation investment proxies by R&D expenditures and firm performance. Our findings concluded that board compensation and frequency of board meeting are considered as important characteristics that would determine the effectiveness of the innovation investment. Thus, in analyzing the innovation investment incurred by the firm, investors should review the corporate governance characteristics as it would determine the effectiveness of the innovation investment in improving firm performance.
Institutional Investors, Dividend Policy and Firm Value—Evidence from China  [PDF]
Jiacai Xiong
Open Journal of Social Sciences (JSS) , 2016, DOI: 10.4236/jss.2016.48015
Abstract: The China stock market and institutional investors have experienced an extraordinary development during the past decades. Therefore, it is important to examine the real effects of institutional investors. This paper investigates relationship between institutional investors and firm value using Chinese listed companies from 2008 to 2014. This paper finds that institutional investors help improve firm value. Further analysis shows that institutional investors improve firm value by increasing cash dividend payout. The empirical results of this paper show that institutional investors help improve corporate governance and reduce agency costs.
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