Publication Type
Working Paper
Version
submittedVersion
Publication Date
7-2016
Abstract
In this paper, we investigate the cash holings of government linked corporations (GLCs) in Singapore, with different levels of Temasek Holdings ownership. We find evidence that Temasek owned public firms hold on average substantially more cash than otherwise similar public firms listed on SGX. This result is robust to different measures of Temasek ownership. We also show that when GLCs have excess cash, they do not spend it on capital expenditure, acquisition, dividends or share repurchase. Instead, they hoard these excess cash leading to an accumulation of cash. In addition, we show that Temasek firms are on average more profitable, however the accumulation of excess cash is reducing their profitability.
Keywords
Cash Holdings, Government-linked Corporation, Corporate Governance
Discipline
Corporate Finance | Finance and Financial Management
Research Areas
Finance
First Page
1
Last Page
27
Identifier
10.2139/ssrn.2648068
Citation
LIU, Chenxi; YAP, Kian Leong Nelson; and ZHOU, Sili.
Do government linked companies hold more cash?. (2016). 1-27.
Available at: https://ink.library.smu.edu.sg/sol_research/2344
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://dx.doi.org/10.2139/ssrn.2648068