| Summary: | 碩士 === 靜宜大學 === 財務金融學系 === 99 === The aim of this study is to examine the mediating effect of agency cost on the relationship between corporate governance and the value of cash holdings. In the SEM (structural equation modeling) setting, first, this study examines the direct effect of governance on the value of cash holdings and agency cost. The results indicate that corporate governance is positively correlated with the value of cash holdings but is negatively correlated with agency cost. Second, we further include agency cost as a mediating variable, and the results show that governance is positively correlated with the value of cash holdings but isn’t significant.
Furthermore, we separate corporate governance into internal and external governance, and we examine the direct effect of internal and external governance on the value of cash holdings simultaneously. We find that the degree of direct effect of internal and external governance on the value of cash holdings is different. External governance is more effective. The evidence indicates that agency cost is only full mediation in the relationship between internal corporate governance and the value of cash holdings. Specifically, corporate governance indeed has influence on the value of cash holdings through the mediating effect of agency cost.
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