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Directors’ education and corporate liquidity: evidence from boards in Taiwan

Author

Listed:
  • Ma-Ju Wang

    () (National Kaohsiung First University of Science and Technology)

  • Xuan-Qi Su

    () (National Kaohsiung First University of Science and Technology)

  • Hong-Da Wang

    () (National Kaohsiung First University of Science and Technology)

  • Yan-Shing Chen

    () (National Taiwan University)

Abstract

Abstract This study relates a firm’s cash holdings and their value to the board of directors’ level of education. Using a sample of firms on the Taiwan Stock Exchange during the period from 2006 to 2012, we find that firms with a highly educated board tend to hold more cash and are associated with a higher value of cash. This fact is especially evident among financially constrained firms. Our findings suggest that highly educated boards provide more efficient monitoring and advisory functions, and thus complement corporate governance.

Suggested Citation

  • Ma-Ju Wang & Xuan-Qi Su & Hong-Da Wang & Yan-Shing Chen, 2017. "Directors’ education and corporate liquidity: evidence from boards in Taiwan," Review of Quantitative Finance and Accounting, Springer, vol. 49(2), pages 463-485, August.
  • Handle: RePEc:kap:rqfnac:v:49:y:2017:i:2:d:10.1007_s11156-016-0597-6
    DOI: 10.1007/s11156-016-0597-6
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    References listed on IDEAS

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    Keywords

    Cash holdings; Education; Director; Corporate governance; Organizational legitimacy;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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