Corporate Governance and Cash Holdings in MENA: Evidence from Internal and External Governance Practices

Basil Al-Najjar, Ephraim Clark

Research output: Contribution to journalArticle

16 Citations (Scopus)

Abstract

This paper explores the impact of internal and external corporate governance practices on the decision to hold cash in MENA countries. Using430 non-financial firms in the MENA region for the period from 2000 to 2009, we find that both types of governance practices are important. We report a negative relationship between board size and cash holdings, evidence that firms hold less cash to reduce agency conflicts. Also, we detect that external governance activities are important in cash holding decisions, since we report that firms belonging to countries with international standards of securities law and bank supervision hold less cash. For our sub-sample of 85 firms, we report evidence that institutional owners are seen to be self-opportunistic and that they aim to maximize their own private benefits.
Original languageEnglish
Pages (from-to)1-12
Number of pages12
JournalResearch in International Business and Finance
Volume39
Issue numberA
Early online date19 Jul 2016
DOIs
Publication statusPublished - Jan 2017
Externally publishedYes

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Governance
Cash holdings
Middle East and North Africa
Corporate governance
Cash
Securities law
Owners
Board size
Agency conflict
Bank supervision
International standards
Private benefits

Cite this

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Corporate Governance and Cash Holdings in MENA : Evidence from Internal and External Governance Practices. / Al-Najjar, Basil; Clark, Ephraim.

In: Research in International Business and Finance, Vol. 39, No. A, 01.2017, p. 1-12.

Research output: Contribution to journalArticle

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