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Article Dans Une Revue Journal of Applied Business Research Année : 2015

Family Control and the Value of Cash Holdings

Imen Derouiche
  • Fonction : Auteur
Majdi Hassen
  • Fonction : Auteur

Résumé

The present study investigates the effects of family control on the value of corporate cash holdings. Using a large sample of French listed firms, the results show that the value of excess cash reserves is lower in family firms than in other firms, reflecting investors’ concern about the potential misuse of cash by controlling families. We also find that the value of excess cash is lower when controlling families are involved in management and when they maintain a grip on control, indicating that investors do not expect the efficient use of cash in these firms. Our findings are consistent with the argument that the extent to which excess cash contributes to firm value is lower when dominant shareholders are likely to expropriate firm resources. Overall, family control seems to be a key determinant of cash valuation when ownership is concentrated.
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Dates et versions

hal-01158104 , version 1 (29-05-2015)

Identifiants

  • HAL Id : hal-01158104 , version 1

Citer

Sabri Boubaker, Imen Derouiche, Majdi Hassen. Family Control and the Value of Cash Holdings. Journal of Applied Business Research, 2015, 31 (2), pp.647-661. ⟨hal-01158104⟩
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