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See detailDoes the board of directors affect cash holdings? A study of French listed firms
Derouiche, Imen UL; Boubaker, Sabri; Nguyen, Duc Khuong

in Journal of Management and Governance (2015), 19(2), 341-370

Prior studies show that agency conflicts are important in explaining corporate financial policies and that the board of directors is central to corporate governance. In this study, we examine the role of ... [more ▼]

Prior studies show that agency conflicts are important in explaining corporate financial policies and that the board of directors is central to corporate governance. In this study, we examine the role of this governing body in the accumulation of cash reserves. Using a sample of 597 French listed firms during 2001–2007, we find that firms with boards deemed to be effective in mitigating agency problems—that is, those appointing independent directors and splitting chief executive officer and chair positions—accumulate less cash reserves than those with less effective boards. Moreover, two-tier boards are more efficient in mitigating the agency costs of free cash flow, leading to less corporate cash hoarding. These findings support the idea that agency conflicts influence cash management policy and that effective boards of directors play an important disciplinary role in a concentrated ownership setting. [less ▲]

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See detailFamily control and the value of cash holdings
Derouiche, Imen UL

in Journal of Applied Business Research (2015), 31

The present study investigates the effects of family control on the value of corporate cash holdings. Using a large sample of French listed firms, the results show that the value of excess cash reserves ... [more ▼]

The present study investigates the effects of family control on the value of corporate cash holdings. Using a large sample of French listed firms, the results show that the value of excess cash reserves is lower in family firms than in other firms, reflecting investors’ concern about the potential misuse of cash by controlling families. We also find that the value of excess cash is lower when controlling families are involved in management and when they maintain a grip on control, indicating that investors do not expect the efficient use of cash in these firms. Our findings are consistent with the argument that the extent to which excess cash contributes to firm value is lower when dominant shareholders are likely to expropriate firm resources. Overall, family control seems to be a key determinant of cash valuation when ownership is concentrated. [less ▲]

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See detailControl-ownership wedge, board of directors, and the value of excess cash
Derouiche, Imen UL; Belkhir, Mohamed; Boubaker, Sabri

in Economic Modelling (2014), 39

This study investigates the effects of the separation of control and ownership on the value of cash holdings in publicly listed French firms. It also sheds light on the role of board independence in such ... [more ▼]

This study investigates the effects of the separation of control and ownership on the value of cash holdings in publicly listed French firms. It also sheds light on the role of board independence in such a relation. Theory suggests that investors are more likely to discount the value of excess cash held by firms with low corporate governance. Using the valuation regression of Fama and French (1998), empirical results show that the value of excess cash holdings decreases dramatically with the separation of control and cash-flow rights of the controlling shareholder. This value discount is, however, less pronounced in firms with more independent boards (i.e., boards with more independent directors and separate chief executive officer and chair positions). Our empirical findings support the argument that excess cash contributes less to firm value when minority shareholders are more likely to be expropriated by controlling shareholders. Independent boards seem to be effective in mitigating investors’ concerns about the use of excess cash. Overall, the results provide compelling evidence that cash valuation is largely influenced by corporate governance quality in a concentrated ownership setting. [less ▲]

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See detailQuel rôle pour le conseil d’administration dans la détention de liquidités ? Cas des entreprises françaises cotées
Derouiche, Imen UL

Book published by Lavoisier (2013)

La présente recherche s’inscrit dans la littérature liant la qualité du système de gouvernance et les politiques financières dans un contexte de propriété concentrée. Elle a pour objectif d’examiner ... [more ▼]

La présente recherche s’inscrit dans la littérature liant la qualité du système de gouvernance et les politiques financières dans un contexte de propriété concentrée. Elle a pour objectif d’examiner l’efficacité du conseil d’administration eu égard à l’effet de ses caractéristiques sur la détention de liquidités par les entreprises. [less ▲]

Detailed reference viewed: 110 (2 UL)