Impact of corporate governance on firm’s cash holding

Abstract

This study seeks to understand the impact of corporate governance on firm cash holding. The study starts with a brief theoretical reflection on corporate governance, cash holding theories and cash holding. Huge amount of literature is discussed in support of that. The study includes 16 companies of textile sector and data is from the year from 2010 to 2015. Agency problem is also discussed in this study. There are two motives of holding cash that is transaction motive and precautionary motive. Independent variables are discussed in respect to cash holdings. Studies based on Pakistan are also included in the study. This study is quantitative one and secondary data is used for our study. The study focuses only on Textile sector in Pakistan. The results have showed that board size is negatively correlated and is significant to cash holding while board independence and CEO-duality shows insignificant results.