Intrinsic corporate governance practices and firm’s cash holdings in pakistan

The study investigates the association of intrinsic corporate governance practices and cash holdings of manufacturing organizations, listed with the Pakistan Stock Exchange (PSX). Panel data extracted from the financial reports of the organizations provided on the website of State Bank of Pakistan (SBP) is applied for the purpose of analysis to study the relationship among variables. The organization's cash holdings are considered the quantity of cash and liquid assets stated in the statement of financial position. Sample of 276 listed manufacturing organizations has been taken by applying census sampling technique. Penal data model, correlation, Random Effect (RE) and Fixed Effect (FE) models are applied for the examination of the association between intrinsic corporate governance practices and cash holdings of manufacturing organizations in Pakistan, listed with the PSX. According to random effect estimates, Board size, CEO duality and Board Independence have significant positive association with cash holdings. Furthermore, results show that the ownership structure has an insignificant association with cash holing. The findings of this study for Pakistani firms have a general resemblance to the findings of previous researchers in developing countries' contexts. Hence, the researcher's contribution is related to Pakistani firms that have different economic settings in comparison to the developed economies. The study has many theoretical implications regarding developing countries' context and practical implications for managers, shareholders, suppliers and other stakeholders in the firms.