The Impact of Corporate Governance on Corporate Cash Holding Value

• Main Authors: Tsai Chun-YU, 蔡俊佑
• Other Authors: Chen Mei-Hua
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/14619289309166641940

碩士 === 國立彰化師範大學 === 商業教育學系 === 96 === After many well-known companies have the accounting scandals in the worldwide countries. The governments and academia have emphasized on corporate governance once again, hoping that decrease the firm valuation discount of agency problems by enforcing corporate governance mechanism. And cash reserves are easily accessible and controllable by management. From the above mentioned, our research attempts to investigate how different corporate governance level impacts firm value by holding cash. Using a sample of about 600 Taiwan-listed companies in our research, and use information disclosure level as a proxy of corporate government; this study finds: 1. The value of holding cash in well governed firms is higher than poorly governed firms. On average, $1.00 of cash in a well governed firms is valued at $1.143, but is valued at only 0.279 in a poorly governed firms . 2. The managers could increase firm value by holding excess cash in well governed firms. It implies that thorough corporate governance mechanism can not only offset the disadvantage of holding superabundant cash but also increase the firm value. 3.The managers can improve the firm performance by holding excess cash in well governed firms.