| Summary: | 碩士 === 國立中正大學 === 會計所 === 95 === This study focuses on the relationships among corporate governance, cash holding, and firm value. The research shows that a corporation with rapid sales growth generally has a potentially high cash holding rate due to great operating cash flow, a high cash flow from operations ratio, a significant dividend payout ratio, and a high research and development expense to sales ratio. On the contrary, a corporation with a large working capital, a high debt ratio, and a great capital expenditure ratio usually has a low cash holding rate. Compared with a new established corporation, the one with a long history usually provides more information to the public and has fewer asymmetric information issues. Efforts of the old-established corporation in information transparency and reputation are helpful for raising capital. Therefore, the old one usually has a lower cash holding rate. On the other hand, a large-scale company has a relatively high cash holding rate.
In addition, the agency theory concludes that the scale of the board and the postions of CEO and COB were held by the same person and the ratios of equity ownership for the inside managers, we find the results are not apparently associated with the cash holding and cannot be the support of agency issues referred in the agency theory. However, a large percentage of the independent directors appointed in the board and a great percentage of voting powers held by institutional investors can reduce agency costs brought by management’s empire building and unreasonable compensation, increasing the cash holding.
Besides, this study reaches a conclusion that high-tech companies in Taiwan maintain excess cash reserves creating positive influence on the firm value.
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