The Impact of Administrative Ownership and Excessive Administrative Confidence of the Executive Director on the Level of Cash Retention in Egyptian Joint Stock Companies - A Test Study on Companies Listed on the Egyptian Stock Exchange

Abd El Raheem, Asmaa Ibrahim

doi:10.21608/aljalexu.2020.78625

The Impact of Administrative Ownership and Excessive Administrative Confidence of the Executive Director on the Level of Cash Retention in Egyptian Joint Stock Companies - A Test Study on Companies Listed on the Egyptian Stock Exchange

Document Type : Original Article

Author

Asmaa Ibrahim Abd El Raheem

Accounting Department Higher Technological Institute El Asher Mn Ramdan Cairo Egypt

10.21608/aljalexu.2020.78625

Abstract

This study aimed to test the impact of managerial ownership and CEO over confidence on the level of cash holding. The study investigates hypothesis on a sample of 80 Egyptian companies listed on Stock Exchange in the period (2013-2018). Using regression analysis, the paper offers empirical evidence that CEO over confidence has negative relation with the level of cash holding in Egyptian companies. This result means that increase (decrease) overconfidence, companies retain less (larger (cash. The results also indicate that there is positive relationship with the level of cash holding
This result means that increase (decrease) managerial ownership, companies retain more(less) cash.This result consistent with the hypotheses of no conflict of interest between management and shareholders through the retention of cash or investment in projects with positive net present value, leading to a high level of cash holding. The results also showed a negative relationship between the CEO overconfidence of the Executive Director and a positive relationship between the managerial ownership if they were tested together on the level of cash holding.

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