TY - JOUR
T1 - The Effect of Governance Mechanisms on Small and Medium-Sized Enterprise Cash Holdings
T2 - Evidence from the United Kingdom
AU - Al-Najjar, Basil
PY - 2015/4/1
Y1 - 2015/4/1
N2 - This paper investigates the impact of governance mechanisms on small and medium-sized enterprise (SME) cash holdings from 2000 to 2009, employing static and dynamic panel data analyses. We find no evidence that firm governance index and insider ownership affect cash holdings. This might indicate that governance mechanisms in SMEs are relatively weak. We also report that chief executive officer compensation has a positive effect on cash holdings. Firm-specific factors such as firm size, leverage, and liquidity negatively affect cash holdings, whereas the research and development ratio and operating risk are positively associated with them. Finally, SMEs have target cash holdings and adjust to these.
AB - This paper investigates the impact of governance mechanisms on small and medium-sized enterprise (SME) cash holdings from 2000 to 2009, employing static and dynamic panel data analyses. We find no evidence that firm governance index and insider ownership affect cash holdings. This might indicate that governance mechanisms in SMEs are relatively weak. We also report that chief executive officer compensation has a positive effect on cash holdings. Firm-specific factors such as firm size, leverage, and liquidity negatively affect cash holdings, whereas the research and development ratio and operating risk are positively associated with them. Finally, SMEs have target cash holdings and adjust to these.
UR - https://www.scopus.com/inward/record.uri?eid=2-s2.0-84924856184&doi=10.1111%2fjsbm.12062&partnerID=40&md5=869d05103fe135d6c4fde0ad59b7849b
U2 - 10.1111/jsbm.12062
DO - 10.1111/jsbm.12062
M3 - Article
VL - 53
SP - 303
EP - 320
JO - Journal of Small Business Management
JF - Journal of Small Business Management
SN - 0047-2778
IS - 2
ER -