Cash and ownership on firms’ market value: evidence from Greek panel data
Authors: Stamatopoulos, Theodoros 
Arvanitis, Stavros 
Chatzimarkaki, Maria 
Issue Date: 1-Jan-2017
Journal: International Journal of Economics and Business Administration 
Volume: 5
Issue: 1
Abstract: 
We implement panel data econometrics on non-linear empirical models to investigate how the firms’ market value is related with cash holdings and ownership concentration, on non-financial listed companies in Greece, before (2000-2009) and during the Eurozone crisis 2010-2015. It is confirmed the existence of an optimum level of cash (CASH) and the top 5 major shareholders ownership (OWN5) at which firms’ return on equity (ROE) has been maximized (concave function), especially over the crisis period and the total one. Yet, a convex function of the Tobin’s Q ratio (Q) on OWN5 has also been revealed significant for all sample periods. The findings support the tradeoff theory and the new kind of agency cost literature on expropriation effects of the minority by the majority. Interaction terms have also been found statistically significant, confirming that the special context of the Eurozone has influenced business, in the narrow Athens Stock Exchange (ASE). The estimated averages that maximize firms’ market values (for instance ROE), in relation to either CASH (0.83 of net assets, during the whole sample period 2000-’15, while 0.77 in the crisis one 2010-’15) or OWN5 (0.10 of equity, during 2000-’15, while 0.36 in the crisis one 2010-’15) could be useful for both investors and policy makers in Greece, a member-country of “sui generis” Eurozone, with an unsustainable public debt.
ISSN: 2381-7356
DOI: 10.35808/ijeba/120
URI: https://uniwacris.uniwa.gr/handle/3000/1223
Type: Article
Department: Department of Accounting and Finance 
School: School of Administrative, Economics and Social Sciences 
Affiliation: University of West Attica (UNIWA) 
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