The Effects of Institutional Ownership on Cash Holding and Value of Cash Holding in Taiwan
| Autor: | Ying-Hao Chen, 陳英豪 |
|---|---|
| Rok vydání: | 2013 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 101 Using the Taiwan data, this paper studies the impacts of institutional ownership on cash holding and value of cash holding. In this paper we develop three testable hypotheses: the monitoring hypothesis, the agency cost hypothesis, and the financing cost hypothesis. The monitoring hypothesis expects that, due to larger (smaller) institutional monitoring effect, firms with higher (lower) institutional ownership are more (less) likely to accumulate cash that shareholders allow managers to hold and exhibit larger (smaller) value of cash holding. The agency cost hypothesis suggests that firms with higher (lower) institutional ownership are expected to exhibit better (worse) corporate governance and could not force management to disgorge excessive cash, in which the case that firms tend to hold less (more) cash but experience larger (smaller) cash value. The financing cost hypothesis predicts that firms with higher (lower) institutional ownership should tend to hold less (more) cash and experience smaller (larger) value of cash holding because of their less (more) serious adverse selection problems and thus a lower (higher) cost of external finance. In a sample of Taiwan listed firms during 1995-2011, we find that firms with higher (lower) institutional ownership hold more (less) cash, as well as such positive relationship between institutional ownership and cash are more pronounced for higher-growth-opportunity firms. Furthermore, we also find that the cash is worth more for higher-institutional-ownership firms than for lower-institutional-ownership firms. Overall, the findings in this paper suggest that the monitoring hypothesis dominates the agency cost hypothesis and the financing cost hypothesis, in term of the effects of institutional ownership on Taiwan listed firms’ cash holding and cash value. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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