Hendrawaty, Ernie and Farichah, Farichah (2017) THE EFFECT OF EXCESS CASH HOLDING ON CORPORATE VALUE THAT IS MODERATED BY FINANCING CONSTRAINTS. In: “ISCRBM2-2017 --- the 2 nd International Seminar of Contemporary Research on Business and Management”,, November 27-28, 2017, Denpasar, Bali. (Submitted)

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Cash holdings allocation exceeding normal cash holdings has multiple consequences, which are increasing financing flexibility and causing agency problems. This study is designed to examine the effect of excess cash holdings on corporate value by using agency theory framework. The sample of study is selected by using the criteria of non-financial companies in Indonesia in 2005-2014 that have cash holding exceeding cash holdings of the estimation result. The study result reveals that excess cash holdings can cause agency problems that negatively affect corporate value, and the negative effect of excess cash holdings on corporate value is stronger on the company that is financially unconstrained according to the compound criteria (dividend paying, high cash flow, low MTB, and low debt). This empirical finding shows that excess cash holding is a significant signal in supporting the agency free cash flow hypothesis.

Item Type: Conference or Workshop Item (Paper)
Subjects: H Social Sciences > HG Finance
Divisions: Fakultas Ekonomi dan Bisnis (FEB) > Prodi Manajemen
Date Deposited: 16 Nov 2017 07:20
Last Modified: 16 Nov 2017 07:20
URI: http://repository.lppm.unila.ac.id/id/eprint/4675

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