Article (Scientific journals)
Excess Control Rights, Multiple Large Shareholders, and Corporate Cash Holding Behavior
Benkraiem, Ramzi; Boubaker, Sabri; Derouiche, Imen et al.
2023In Finance
Peer reviewed
 

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Keywords :
Excess control rights; Corporate cash holding behavior; Multiple large shareholders
Abstract :
[en] This article examines the effects of excess control rights of the controlling shareholder and the presence of multiple large shareholders on the propensity of firms to save cash out of cash flow, i.e. the sensitivity of cash to cash flow. Using a data set covering 6,430 firm–year observations of 634 French listed firms, the evidence shows that firms have high cash flow sensitivity of cash when the controlling shareholder‘s control rights exceed its cash-flow ownership. However, this sensitivity decreases with the contestability of the controlling owner‘s power. Taken together, these findings provide empirical support to the argument that firms experiencing excess control rights save more cash out of cash flow due to their considerable financial constraints that are lowered in the presence of high control contestability.
Disciplines :
Finance
Author, co-author :
Benkraiem, Ramzi;  Audencia Business School
Boubaker, Sabri;  EM Normandie Business School, Métis Lab, France
Derouiche, Imen ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Economics and Management (DEM)
Galariotis, Emilios;  Audencia Business School
External co-authors :
yes
Language :
English
Title :
Excess Control Rights, Multiple Large Shareholders, and Corporate Cash Holding Behavior
Publication date :
2023
Journal title :
Finance
ISSN :
0752-6180
eISSN :
2101-0145
Publisher :
Presses Universitaires de Grenoble, Grenoble, France
Peer reviewed :
Peer reviewed
Available on ORBilu :
since 19 January 2022

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