Institutional ownership, cross-shareholdings and corporate cash reserves in Japan

Nguyen, P; Rahman, N

Institutional ownership, cross-shareholdings and corporate cash reserves in Japan

Nguyen, P Rahman, N

Permalink

Publisher:: Wiley
Publication Type:: Journal Article
Citation:: Accounting and Finance, 2020, 60, (S1), pp. 1175-1207
Issue Date:: 2020

Closed Access

	Filename	Description	Size
	10.1111 acfi.12415.pdf	Published version	212.86 kB	Adobe PDF	View/Open

Copyright Clearance Process

Recently Added
In Progress
Closed Access

This item is closed access and not available.

Full metadata record

Field	Value	Language
dc.contributor.author	Nguyen, P
dc.contributor.author	Rahman, N https://orcid.org/0000-0002-8251-7796
dc.date.accessioned	2020-08-05T08:55:54Z
dc.date.available	2020-08-05T08:55:54Z
dc.date.issued	2020
dc.identifier.citation	Accounting and Finance, 2020, 60, (S1), pp. 1175-1207
dc.identifier.issn	0810-5391
dc.identifier.issn	1467-629X
dc.identifier.uri	http://hdl.handle.net/10453/141973
dc.description.abstract	© 2018 Accounting and Finance Association of Australia and New Zealand Cross-country studies document a negative relation between corporate governance and cash holdings. In contrast, this relation is found to be positive in the United States. In this paper, we examine the case of Japanese firms. Using institutional ownership and cross-shareholdings as the main governance variables, we show that better governance is associated with higher cash balances as in the United States. The reason is that better-governed firms make better investment decisions. Their investments are not driven by excess liquidity and result in higher profitability and higher firm valuation. Overall, our findings indicate that management profligacy is a bigger concern to shareholders than management propensity to hoard cash because of risk aversion.
dc.language	en
dc.publisher	Wiley
dc.relation.ispartof	Accounting and Finance
dc.relation.isbasedon	10.1111/acfi.12415
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1402 Applied Economics, 1501 Accounting, Auditing and Accountability, 1502 Banking, Finance and Investment
dc.subject.classification	Accounting
dc.title	Institutional ownership, cross-shareholdings and corporate cash reserves in Japan
dc.type	Journal Article
utslib.citation.volume	60
utslib.for	1402 Applied Economics
utslib.for	1501 Accounting, Auditing and Accountability
utslib.for	1502 Banking, Finance and Investment
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Finance Discipline
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Strength - CCG - Centre for Corporate Governance
utslib.copyright.status	closed_access	*
pubs.consider-herdc	true
dc.date.updated	2020-08-05T08:55:49Z
pubs.issue	S1
pubs.publication-status	Published
pubs.volume	60
utslib.citation.issue	S1

Abstract:

© 2018 Accounting and Finance Association of Australia and New Zealand Cross-country studies document a negative relation between corporate governance and cash holdings. In contrast, this relation is found to be positive in the United States. In this paper, we examine the case of Japanese firms. Using institutional ownership and cross-shareholdings as the main governance variables, we show that better governance is associated with higher cash balances as in the United States. The reason is that better-governed firms make better investment decisions. Their investments are not driven by excess liquidity and result in higher profitability and higher firm valuation. Overall, our findings indicate that management profligacy is a bigger concern to shareholders than management propensity to hoard cash because of risk aversion.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/141973