Cash holdings and corporate governance in family-controlled firms

摘要

This study examines the association between corporate governance and cash policy within family-controlled firms. Family businesses are complex, because, in addition to dealing with common business requirements and opportunities, they must consider the needs and desires of the family owners. The results of this study show that the impact of corporate governance, with its separation of control rights and cash flow rights, director-ownership-in-pledge ratio and proportion of independent directors on cash policy, differs between family-controlled and nonfamily-controlled firms. Separation of seat control rights and cash flow rights, as well as chair duality, significantly affects the cash policy within different levels of cash holdings in firms.