Free cash flow, overinvestment and corporate governance : evidence from Thailand

Name: Sarunya Piriyakriangkrai

keyword: Free cash flow

LCSH: Cash management -- Thailand

; Overinvestment

LCSH: Investments

; Corporate governance

; Agency cost

Abstract: The independent study investigates the relationship between free cash flow and overinvestment of the firms using data in SET market between 2011 and 2015. The result shows significant positive sign on free cash flow that means higher firm’s free cash flow causes more overinvestment expenditures. It is consistent with agency cost theory. Managers of companies with massive free cash flow will invest in low-return projects or overinvested. This research also includes corporate governance factor to see whether it can resolve overinvestment issue. Instead of using CG data from annual report, I use CG score from Thai-IOD that record firm’s governance of all listed companies. The result indicates investment level in Thailand highly depends on free cash flow. Governance may not be relevant to firm’s investment

Thammasat University. Thammasat University Library

Address: BANGKOK

Email: preserv@tu.ac.th

Name: Sakkakom Maneenop

Role: advisor

Created: 2016

Modified: 2021-06-14

Issued: 2021-06-14

วิทยานิพนธ์/Thesis

application/pdf

DOI: 10.14457/TU.the.2016.359

eng

DegreeName: Master of Science

Level: Master's Degree

Descipline: Finance

Grantor: Thammasat University

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