An Analytical Study of the Impact of Managerial Enrichment on Investment Efficiency in light of Cash Holding

Document Type : Original Article

Authors

1 Accounting Department, Faculty of Commerce, Cairo University

2 Department of Accounting, Faculty of Commerce, Cairo University

Abstract

This research aims to study the relationship between managerial enrichment, and investment efficiency in firms listed on the Egyptian Stock Exchange. To achieve this, the researcher conducted a field study on a sample of 106 firms listed on the Egyptian Stock Exchange, covering the period from 2014 to 2020, with a total of 1,421 annual observations. Data were compiled based on financial statements published on the Thomson Reuters website, as well as published financial reports. The results of the statistical analysis revealed a negative significant relationship between enrichment managerial, and investment efficiency. There is also a negative significant relationship between the CEO's tenure and investment efficiency, and a positive significant relationship between the CEO's tenure and underinvestment. The study results also indicated a significant positive relationship between the CEO’ duality and underinvestment. There is also a significant positive relationship between the percentage of executives and overinvestment. The relationship between managerial entrenchment and investment efficiency in light of cash holding was also tested, and the negative significant relationship them was still found. There are also a significant positive relationship also emerged between managerial entrenchment and overinvestment in light of cash holding. Finally, the study results demonstrated a negative significant relationship between managerial ownership in light of cash holding and investment efficiency.

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