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Do board characteristics moderate the relationship between political connections and cash holdings? insight from Asian countries

Author

Listed:
  • Abdullah

    (Karachi Institute of Economics and Technology)

  • Muhammad Arsalan Hashmi

    (Dow University of Health Sciences)

  • Rayenda Khresna Brahmana

    (Coventry University)

  • Humayun Fareeduddin

    (Karachi Institute of Economics and Technology)

Abstract

This study investigates the impact of board characteristics on the relationship between political connections and cash holdings in Asian countries. The findings suggest that Asian firms with political connections, large boards, and gender diversity have lower cash holdings, while firms with CEO duality have higher cash holdings. Further, the study provides unique evidence that Asian firms with large boards and gender diversity have a moderating effect and strengthen the negative influence of political connections on cash holdings. We also find that CEO duality moderates the influence of political connections on cash holdings in Asian countries. The authors conclude that strong board monitoring and governance mechanisms are crucial for the effective use of cash, particularly in firms with political connections. This research contributes to the literature by presenting novel evidence that board characteristics critically influence the relationship between political connections and cash holdings in the Asian context.

Suggested Citation

  • Abdullah & Muhammad Arsalan Hashmi & Rayenda Khresna Brahmana & Humayun Fareeduddin, 2024. "Do board characteristics moderate the relationship between political connections and cash holdings? insight from Asian countries," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 21(4), pages 624-641, December.
    • Handle: RePEc:pal:ijodag:v:21:y:2024:i:4:d:10.1057_s41310-023-00218-z
    DOI: 10.1057/s41310-023-00218-z
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