IDEAS home Printed from https://ideas.repec.org/a/spt/apfiba/v6y2016i3f6_3_10.html
   My bibliography  Save this article

How does Corporate Governance Affect Free Cash Flow?

Author

Listed:
  • Dan Lin
  • Lu Lin

Abstract

According to the free cash flow hypothesis, large free cash flows are likely to lead to managerial discretion and agency problems. This is because retaining free cash flows reduces the ability of capital market to monitor managers. The aim of this study is to examine the relationship between corporate governance and free cash flow for a sample of Canadian companies. This study does not find evidence supporting the agency costs of free cash flow hypothesis. The results show that better governed firms have larger free cash flows. The increased free cash flows can be a result of better internal operating efficiency.

Suggested Citation

  • Dan Lin & Lu Lin, 2016. "How does Corporate Governance Affect Free Cash Flow?," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 6(3), pages 1-10.
    • Handle: RePEc:spt:apfiba:v:6:y:2016:i:3:f:6_3_10
    as

    Download full text from publisher

    File URL: http://www.scienpress.com/Upload/JAFB%2fVol%206_3_10.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jagjeevan Kanoujiya & Rebecca Abraham & Shailesh Rastogi & Venkata Mrudula Bhimavarapu, 2023. "Transparency and Disclosure and Financial Distress of Non-Financial Firms in India under Competition: Investors’ Perspective," JRFM, MDPI, vol. 16(4), pages 1-20, March.
    2. Fuad Suliman Al-Fasfus, 2020. "Impact of Free Cash Flows on Dividend Pay-Out in Jordanian Banks," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(5), pages 547-558, May.
    3. Aysegul ERTUGRUL, 2023. "Investigation of the Relationship between Corporate Governance and Capital Structure in Insurance Companies with Panel Regression Analysis," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 17(1), pages 107-130.
    4. Marco Meyer & Chun Wei Choo, 2024. "Harming by Deceit: Epistemic Malevolence and Organizational Wrongdoing," Journal of Business Ethics, Springer, vol. 189(3), pages 439-452, January.
    5. Sainati, Tristano & Locatelli, Giorgio & Mignacca, Benito, 2023. "Social sustainability of energy infrastructures: The role of the programme governance framework," Energy, Elsevier, vol. 282(C).
    6. Badar Alshabibi, 2021. "The Role of Institutional Investors in Improving Board of Director Attributes around the World," JRFM, MDPI, vol. 14(4), pages 1-33, April.
    7. repec:bfv:journl:031 is not listed on IDEAS
    8. Victor Dragotă & Camelia Delcea, 2019. "How Long Does It Last to Systematically Make Bad Decisions? An Agent-Based Application for Dividend Policy," JRFM, MDPI, vol. 12(4), pages 1-34, November.
    9. Leviticus Mensah & Murad Abdurahman Bein, 2023. "Sound Corporate Governance and Financial Performance: Is There a Link? Evidence from Manufacturing Companies in South Africa, Nigeria, and Ghana," Sustainability, MDPI, vol. 15(12), pages 1-24, June.
    10. Amaury de Vicqde & Christiaan van Bochove, 2024. "Lending a hand: help banks in the Netherlands, 1848–1898," European Review of Economic History, European Historical Economics Society, vol. 28(2), pages 163-192.
    11. Rajesh Raut & Amruta Deshpande & Kirti Gupta & Natashaa Kaul & Nivedita Ekbote, 2023. "Status of Women in Corporate Governance in the Private Sector Companies in India," Indian Journal of Corporate Governance, , vol. 16(1), pages 94-107, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spt:apfiba:v:6:y:2016:i:3:f:6_3_10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eleftherios Spyromitros-Xioufis (email available below). General contact details of provider: http://www.scienpress.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.