Corporate cash holdings: An empirical investigation of UK companies

Aydin Ozkan, Neslihan Ozkan

Research output: Contribution to journalArticle

255 Citations (Scopus)

Abstract

This paper investigates the empirical determinants of corporate cash holdings for a sample of UK firms. We focus on the importance of managerial ownership among other corporate governance characteristics including board structure and ultimate controllers of companies. We present evidence of a significant non-monotonic relation between managerial ownership and cash holdings. In addition, we observe that the way in which managerial ownership exerts influence on cash holdings does not change with board composition and, in general, the presence of ultimate controllers. The results reveal that firms' growth opportunities, cash flows, liquid assets, leverage and bank debt are important in determining cash holdings. Our analysis also suggests that firm heterogeneity and endogeneity are crucial in analysing the cash structure of firms.

LanguageEnglish
Pages2103-2134
Number of pages32
JournalJournal of Banking and Finance
Volume28
Issue number9
DOIs
Publication statusPublished - 1 Sep 2004
Externally publishedYes

Fingerprint

Empirical investigation
Cash holdings
Managerial ownership
Controller
Board composition
Cash flow
Bank debt
Firm growth
Endogeneity
Board structure
Assets
Corporate governance
Cash
Growth opportunities
Leverage
Firm heterogeneity

Cite this

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Corporate cash holdings : An empirical investigation of UK companies. / Ozkan, Aydin; Ozkan, Neslihan.

In: Journal of Banking and Finance, Vol. 28, No. 9, 01.09.2004, p. 2103-2134.

Research output: Contribution to journalArticle

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