Influence of governance bundles and directors' social capital on cash holding in foreign cross-listed firms

Lodh, Suman ORCID logoORCID: https://orcid.org/0000-0002-4513-1480, Nandy, Monomita ORCID logoORCID: https://orcid.org/0000-0001-8191-2412 and Kaur, Jaskaran (2022) Influence of governance bundles and directors' social capital on cash holding in foreign cross-listed firms. International Journal of Finance & Economics . ISSN 1076-9307 [Article] (Published online first) (doi:10.1002/ijfe.2650)

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Abstract

This paper provides new evidence on how both governance bundles and directors’ social capital together can help to determine cash holdings for foreign cross-listed firms. Using a large cross-country sample of 1,677 publicly listed firms from 32 countries during the period of 2004 – 2015, we find a positive relationship between governance bundles and cash holdings for foreign cross-listed firms with higher directors’ social capital. We address potential issue of endogeneity. So, our findings are robust to alternative model specifications and instrumentations and alternative measure of social capital. The findings of our study contribute to the inconclusive decision in the academic literature related to cash holdings, governance bundles, and directors’ social capital, especially related to the foreign cross listed firms. In addition, the findings can assist the stakeholders of foreign cross-listed firms to understand the intention of the firms’ cash holdings and allow policy makers to identify the need of modification for governance structure by controlling the opportunistic behaviour of the firm manager.

Item Type: Article
Sustainable Development Goals:
Keywords (uncontrolled): cash holding, directors' network, excess centrality, foreign cross listing, governance bundles, social capital
Research Areas: A. > Business School > Accounting and Finance
Item ID: 35121
Notes on copyright: © 2022 The Authors. International Journal of Finance & Economics published by John Wiley & Sons Ltd.
This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
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Depositing User: Suman Lodh
Date Deposited: 25 May 2022 11:04
Last Modified: 07 Jun 2022 05:20
URI: https://eprints.mdx.ac.uk/id/eprint/35121

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