9 research outputs found
Firms cash management, adjustment cost and its impact on firms’ speed of adjustment-A cross country analysis
We investigate the firms’ specific attributes that determine the difference in speed of adjustment
(SOA) towards the cash holdings target in the Scandinavian countries: Denmark,
Norway and Sweden. We examine whether Scandinavian firms maintain an optimal level
of cash holdings and determine if the active cash holdings management is associated with
the firms’ higher SOA and lower adjustment costs. Our findings substantiate that a higher
level of off-target cost induces professional managers to rebalance their cash level towards
the optimal balance of cash holdings. Our results reveal that Scandinavian firms accelerate
SOA towards cash targets primarily for the precautionary motive. Moreover, our results
show that SOA is heterogeneous across Scandinavian firms based on adjustment cost and
deviate cash holdings towards the target mainly with the support of internal financing. Furthermore,
our empirical findings show that the SOA of Norwegian firms is significantly
higher than the Danish and Swedish firms
Collateral, relationship lending and family firms
Relationship lending, Collateral, SME, Private family firms, Decision tree analysis, L26,
Revisiting agency theory: evidence of board independence and agency cost from Bangladesh
This study examines the influence of board independence on firm agency cost among listed firms in Bangladesh, which feature concentrated ownership and high insider representation on corporate boards. This study uses three measures of agency cost: the 'expense ratio', the 'Q-free cash flow interaction' and the 'asset utilization ratio'. The finding of the study is that board independence can reduce the firm agency cost only under 'asset utilization ratio' measure of agency cost. These findings are robust to several robustness tests. Furthermore, the non-linearity tests suggest that the benefit of outside independent directors is generally plausible as a factor controlling agency costs in the case of a medium level of board independence. Overall, these findings do not reject the validity of agency theory, supporting the Anglo-American orthodoxy promoting outside independent directors as good monitors