Financial Constraints, Corporate Governance and the Value of Cash

2019 ◽  
Author(s):  
Marcelo Ermel
Keyword(s):  
Corporate Governance ◽  
Financial Constraints ◽  
Value Of Cash

scholarly journals Impact of Corporate Governance on Firms’ Financial Flexibility in the Emerging Economy: Evidence From Bangladesh

2019 ◽  
Vol 9 (4) ◽  
pp. 183
Author(s):  
Md Rashidul Islam ◽  
Man Wang ◽  
Muhammad Zulfiqar
Keyword(s):  
Corporate Governance ◽  
Firm Size ◽  
Significant Influence ◽  
Financial Constraints ◽  
Positive Impact ◽  
Financial Flexibility ◽  
Book Value ◽  
Internal Funds ◽  
Debt Capacity ◽  
The Relationship

Corporate governance has a positive impact on firm performance. Financial flexible firms are a better performer when there are financial constraints as well as financial crises. However, what motivates financial flexibility is a dearth research area in the existing finance literature. The objectives of this research are to investigate the relationship between corporate governance and financial flexibility; how corporate governance influence financial flexibility; and, what factors of corporate governance are dominant to influence financial flexibility. To pursue the research objectives we chose Cement Industry of Bangladesh as a case. We consider liquidity, Internal Funds and Unused debt capacity as the proxy of financial flexibility and Ownership Concentration, Board Size, Board Independence as Corporate Governance variables and Firm Size, Market to Book Ratio, Debt Capacity, Financial Constraints and Firm Age as control variable to estimate the relationship between corporate governance and financial flexibility. This study evidences that Board Structure has no significant influence on firms’ cash holding(Liquidity).However, Firms Age and Market to Book Value have a significant influence on firms' cash position. This study also finds that Ownership Structure has no positive impact on Firms' Unused Debt Capacity but Financial Constraints and Market to Book Value have a positive significant impact on firms' unused debt capacity. However, Firm Size has a positive relationship with Internal Funds.

Financial Constraints, Investment, and the Value of Cash Holdings

2009 ◽  
Vol 23 (1) ◽  
pp. 247-269 ◽  
Author(s):  
David J. Denis ◽  
Valeriy Sibilkov
Keyword(s):  
Financial Constraints ◽  
Cash Holdings ◽  
Value Of Cash

Corporate Governance, Tax Avoidance, and Financial Constraints

2018 ◽  
Vol 47 (3) ◽  
pp. 651-677 ◽  
Author(s):  
Onur Bayar ◽  
Fariz Huseynov ◽  
Sabuhi Sardarli
Keyword(s):  
Corporate Governance ◽  
Financial Constraints ◽  
Tax Avoidance

Corporate Investment and Hotel Firm Value: Does Corporate Governance Matter in Financially Constrained Firms?

2018 ◽  
Vol 59 (4) ◽  
pp. 339-351
Author(s):  
Tarik Dogru
Keyword(s):  
Corporate Governance ◽  
Corporate Finance ◽  
Firm Value ◽  
Financial Constraints ◽  
Financial Constraint ◽  
Corporate Investments ◽  
Corporate Governance Mechanisms ◽  
The Relationship ◽  
Practical Implications

Corporate investments are expected to create value for firms. Although some studies report evidence supporting such expectations, many studies document contradictory findings. However, it is not clear why corporate investments create value in some firms but reduce value in others. The purpose of this study is to examine the extent to which the quality of corporate governance and the degrees of financial constraints affect the relationship between corporate investments and hotel firm value in a unified model where both weak corporate governance and financial constraint problems are concurrently observed. Shareholders of poorly governed firms place a lower value on corporate investments compared with those of well-governed firms, whereas shareholders of financially constrained firms perceive corporate investments to be of greater value compared with those of unconstrained firms. The results further showed that CEOs of financially constrained firms make value-increasing investments despite poor corporate governance mechanisms. Theoretical and practical implications are discussed within the realm of corporate finance theories.

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