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The Effect of Governance Mechanisms on Small and Medium-Sized Enterprise Cash Holdings: Evidence from the United Kingdom

Al-Najjar, Basil (2015) The Effect of Governance Mechanisms on Small and Medium-Sized Enterprise Cash Holdings: Evidence from the United Kingdom. Journal of Small Business Management, 53 (2). pp. 303-320. ISSN 0047-2778

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Abstract

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.

Item Type: Article
Subjects: H Social Sciences > HG Finance
Schools: Huddersfield Business School
Related URLs:
Depositing User: Basil Al-Najjar
Date Deposited: 14 Aug 2017 08:41
Last Modified: 14 Aug 2017 08:41
URI: http://eprints.hud.ac.uk/id/eprint/32776

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