Corporate cash holdings: An empirical investigation of UK companies

Aydin Ozkan, Neslihan Ozkan

Research output: Contribution to journalArticlepeer-review

581 Citations (Scopus)


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.

Original languageEnglish
Pages (from-to)2103-2134
Number of pages32
JournalJournal of Banking and Finance
Issue number9
Publication statusPublished - 1 Sep 2004
Externally publishedYes


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