Financial constraints, corporate governanceand corporate cash holdings: evidence from Thai market

ข้อจำกัดทางการเงิน การกำกับดูแลกิจการ และ ปริมาณการถือเงินสดขององค์กรหลักฐานจากตลาดในประเทศไทย

Name: Pantawat Tangchitpianvit

Abstract: The objectives of this paper are to examine the relationship between corporate governance and financial constraints which play a substitution role in mitigating agency conflicts associated to corporate cash holdings of Thai listed company covering the period from 2008 to 2019. I use five firm specific characteristics of financial constraints i.e. annual payout ratio, firm size, leverage ratio, lifecycle ratio as well as collateral asset ratio and corporate governance score as proxies to determine the level of cash holdings. The result provides that financial constrained-firms hold larger amount of cash than financial less constrained-firms in order to have adequate financial cash slack for unanticipated situation. This is consistent with the study of Opler et al. 1999. In addition, an interesting finding is that corporate governance helps financially less-constrained firms to mitigate agency conflicts in corporate cash holdings. This is also consistent with the study of Harford et al. (2008) which suggests that stronger corporate governance will reduce agency conflict because shareholders can ensure that they will be better protected their wealth so they will allow firms to hold larger amount of cash holdings. Therefore, my paper suggests that the effectiveness of corporate governance strongly interrelate with financial constraints on corporate cash holdings in Thailand.

Chulalongkorn University. Office of Academic Resources

Address: BANGKOK

Email: cuir@car.chula.ac.th

Name: Suparatana Tanthanongsakkun

Role: advisor

Created: 2020

Modified: 2023-02-08

Issued: 2023-02-08

วิทยานิพนธ์/Thesis

application/pdf

URL: http://cuir.car.chula.ac.th/handle/123456789/75932

eng

DegreeName: Master of Science

Level: Master's Degree

Descipline: Finance

Grantor: Chulalongkorn University

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