Title: Corporate governance and cash holdings: new evidence from Asian markets

Authors: Seyed Alireza Athari

Addresses: Advanced Research Centre, European University of Lefke, Northern Cyprus, TR-10 Mersin, Turkey; Department of Business, Holy Spirit University of Kaslik, Kaslik, Lebanon

Abstract: This paper examines the impacts of the firm and country-level governance settings on Asian firms' cash holdings. Furthermore, this study investigates the effect of corporate governance components on cash holdings and also probes the impact of governance settings on firms' excess cash. This study selects 608 listed companies operating in Asian markets and performs panel data approaches between 2010-2017. The findings reveal that companies with stronger governance mechanisms stockpile less cash, supporting the agency theory. Besides, the findings highlight that the effect of corporate governance is more prominent in strong investor protection environments, implying that they are complements. Likewise, further analysis shows that firms hold less cash by increasing independent directors, splitting CEO and chair positions, and also increasing the diversity of the board. Unlike ineffective legal systems, the results also reveal that a strong governance system leads firms to decrease capital investment but increase R&D investment and dividend payouts. More specifically, the results show that in strong investor protection settings, companies with strong corporate governance invest a significant 0.5% and 0.1% more in R&D and dividend payouts than their counterparts.

Keywords: corporate governance; CG; investor protection; IP; cash holdings; country risk; Asian markets.

DOI: 10.1504/IJBEM.2026.152670

International Journal of Business and Emerging Markets, 2026 Vol.18 No.2, pp.213 - 250

Received: 27 Jun 2023
Accepted: 17 Aug 2023
Published online: 07 Apr 2026 *

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