Hendrawaty, Ernie (2016) EXCESS CASH HOLDINGS AS AN INDICATOR OF AGENCY PROBLEMS. In: Thirteenth AGBA World Congress, November 26-28, 2016, Solo, INDONESIA.

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The paper examine implications of excess cash holdings on firm value based on agency theory. For this purpose, this research use a sample of Indonesian non financial public firms for the period 2000-2011 whose cash holdings exceed normal cash holdings. This paper use panel regression techniques to estimate cash holdings. Refer to that estimation, from total 1828 observations, 672 of them set cash holdings exceed cash holdings normal. First, this research find that excess cash holdings has a negative effect on firm value. Second, the negative effects of excess cash holdings on firm value is stronger for financially unconstrained firms classified by multiple criterions (paying dividends, high cash flow, low MTB and low debt). Third to fifth, the negative effects of excess cash holdings on firm value is stronger for more concentrated ownership, for more dispersed ownership and for more financial distress. Overall, these empirical findings show that excess cash holdings can be a significant indicator of agency problem. Key words: excess cash holdings, agency problem, agency theory.

Item Type: Conference or Workshop Item (Paper)
Subjects: H Social Sciences > HG Finance
Divisions: Fakultas Ekonomi dan Bisnis (FEB) > Prodi Manajemen
Date Deposited: 02 Jun 2017 20:51
Last Modified: 02 Jun 2017 20:51
URI: http://repository.lppm.unila.ac.id/id/eprint/436

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