Corporate governance and the marginal cash value for Korean retail firmsopen access
- Authors
- Lee, Jeong-Hwan; Kim, Sang-Su
- Issue Date
- May-2016
- Publisher
- Korea Distribution Science Association (KODISA)
- Keywords
- Cash management; Corporate governance; Manager-shareholder conflicts; Marginal value of cash
- Citation
- Journal of Distribution Science, v.14, no.5, pp.27 - 37
- Indexed
- SCOPUS
KCI
- Journal Title
- Journal of Distribution Science
- Volume
- 14
- Number
- 5
- Start Page
- 27
- End Page
- 37
- URI
- https://scholarworks.bwise.kr/hanyang/handle/2021.sw.hanyang/154656
- DOI
- 10.15722/jds.14.5.201605.27
- ISSN
- 1738-3110
- Abstract
- Purpose - Prior theories expect a lower marginal value of cash for weak governance firms. To test this hypothesis, we examine the relationship between corporate governance structures and marginal cash values in Korean retail firms.
Research design, data, and methodology - We estimate marginal cash values based on the model of Faulkender & Wang (2006). The retail firms listed in Korean Stock Exchange from 2005 to 2013 are analyzed. Corporate governance scores are provided by Korean Corporate Governance Services.
Results - We show a higher marginal value of cash for the weak governance retail firms in terms of total governance score. Our analysis on a detailed set of governance scores generally confirms this tendency. Yet, a higher marginal cash value is obtained for the firms with better board structures and dividend policies.
Conclusions - Our findings argue against the agency view of cash policy predicting a negative relationship between corporate governance scores and marginal cash values. A low marginal value of cash, widely observed in the sample firms, also supports severe resource diversion problem in Korean corporations.
- Files in This Item
-
- Appears in
Collections - 서울 경제금융대학 > 서울 경제금융학부 > 1. Journal Articles
![qrcode](https://api.qrserver.com/v1/create-qr-code/?size=55x55&data=https://scholarworks.bwise.kr/hanyang/handle/2021.sw.hanyang/154656)
Items in ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.