Navigating the capital investment through national governance in BRICS economies: the role of cash holdings

IF 2.3 Q2 BUSINESS, FINANCE

Asian Review of Accounting Pub Date : 2023-11-21 DOI:10.1108/ara-02-2023-0043

Umar Farooq, Ahmad A. Al-Naimi, M. Arfeen, M. Alnaimat

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Abstract

PurposeThe current analysis aims to explore the role of cash holdings in the nexus of national governance and capital investment (CIN).Design/methodology/approachTo achieve this aim, the authors sample the nonfinancial enterprises from 5 Brazil, Russia, India, China, South Africa (BRICS) economies and employ system generalized method of moments(GMM) models as an estimation technique.FindingsThe empirical analysis infers that national governance has a positive relationship with CIN and a negative relationship with cash holdings. The cash holdings negatively determine CIN. However, the cash holdings show a positive relationship with CIN in the presence of the national governance index (NGI).Research limitations/implicationsThe important policy layout of the current analysis is that corporate managers should reduce cash holdings during better governance situations. Alternatively, corporate managers can disentangle the negative impact of bad country governance conditions on CIN by holding more cash.Originality/valueThe study is innovative as it explores mediating impact of cash holdings in the NGI-CIN nexus.

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通过金砖国家经济体的国家治理引导资本投资：现金持有量的作用

为实现这一目标，作者对巴西、俄罗斯、印度、中国、南非（金砖五国）5 个经济体的非金融企业进行了抽样调查，并采用系统广义矩方法（GMM）模型作为估计技术。现金持有量对 CIN 具有负向决定作用。研究局限/启示当前分析的重要政策布局是，在治理情况较好的情况下，企业管理者应减少现金持有量。或者，企业管理者可以通过持有更多现金来消除不良国家治理条件对 CIN 的负面影响。原创性/价值本研究具有创新性，因为它探讨了现金持有在 NGI-CIN 关系中的中介影响。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Asian Review of Accounting BUSINESS, FINANCE-

CiteScore

3.20

自引率

25.00%

发文量

期刊介绍： Covering various fields of accounting, Asian Review of Accounting publishes research papers, commentary notes, review papers and practitioner oriented articles that address significant international issues as well as those that focus on Asia Pacific in particular.Coverage includes but is not limited to: -Financial accounting -Managerial accounting -Auditing -Taxation -Accounting information systems -Social and environmental accounting -Accounting education Perspectives or viewpoints arising from regional, national or international focus, a private or public sector information need, or a market-perspective or social and environmental perspective are greatly welcomed. Manuscripts that present viewpoints should address issues of wide interest among accounting scholars internationally and those in Asia Pacific in particular.

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