Proceedings of the International Conference on Business, Management, Accounting and Sustainable Economy (ICBMASE 2023)

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Governance and Financial Constraints as Moderating the Relationship Between Cash Holdings and Firm Value

Authors
Adilah Permananingrum1, *
1National University, Jakarta, Indonesia
*Corresponding author. Email: adilahpermana@gmail.com
Corresponding Author
Adilah Permananingrum
Available Online 2 May 2024.
DOI
10.2991/978-94-6463-394-8_13How to use a DOI?
Keywords
Cash holdings; Financial constraint; Firm value; Good governance
Abstract

The relationship between the ideal amount of cash a company holds and the firm value produces varying results. This research, therefore, contributes to this relationship by looking at the role of corporate governance and financial constraints. The sample was taken using a purposive sampling technique, and a company sample of 219 companies was obtained with an observation period of 10 years (2012–2021 period). The analysis used is the Ordinary Least Square (OLS) estimation method with the help of STATA 15.1. The results support the agency theory that excess cash the company holds reduces firm value. None of the governance variables significantly moderate cash holding and firm value. In contrast to the company’s financial condition, a company increasingly experiencing financial constraints will strengthen the decreasing effect of increased cash holding on firm value. Companies must try to set cash holdings in an ideal amount, not to reduce firm value. Likewise, companies must also try to prevent financial constraints from occurring in order to maintain firm value stability.

Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Conference on Business, Management, Accounting and Sustainable Economy (ICBMASE 2023)
Series
Advances in Economics, Business and Management Research
Publication Date
2 May 2024
ISBN
978-94-6463-394-8
ISSN
2352-5428
DOI
10.2991/978-94-6463-394-8_13How to use a DOI?
Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Adilah Permananingrum
PY  - 2024
DA  - 2024/05/02
TI  - Governance and Financial Constraints as Moderating the Relationship Between Cash Holdings and Firm Value
BT  - Proceedings of the International Conference on Business, Management, Accounting and Sustainable Economy (ICBMASE 2023)
PB  - Atlantis Press
SP  - 132
EP  - 142
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-394-8_13
DO  - 10.2991/978-94-6463-394-8_13
ID  - Permananingrum2024
ER  -