The Impact of Country-Level Governance and Firm-Level Corporate Governance on Cash Holdings in PSX-100 Index Listed Firms of Pakistan

Abstract

The central goal of our study is to observe the influence of country level governance, firm level corporate governance and control variables on the cash holdings of non-financial PSX listed firms in Pakistan. The data is collected from 2007 to 2018 of PSX 100 index listed firms of Pakistan in order to perform the analysis. Furthermore, unit root test, Breusch-Pagan test and regression test are the panel techniques which are used in the study. The findings of unit root test show that there is no existence of trend among the variables. Similarly, the Breusch-Pagan test detects that the fixed/random effect model is the suitable method among pooled regression model and fixed/random effect model. The results of regression test tell that country-level governance, board size, board independence, CEO duality and sales growth have positive relationship with corporate cash holdings however the managerial ownership structure, firm size and leverage are negatively related to cash holdings.