Examining the Effect of CEO Ownership on Cash Holdings and Firm Value Using Moderating Processes

Shareholders’ wealth can be maximized by enhancing firm value. Thus, it is important to identify factors that can affect firm value. In this study, an integrated research model was used to investigate if CEO ownership moderate the effect of cash holdings on firm value. The data, drawn from publicly listed firms over a period of 12 years, were analyzed. In sum, this study showed significant moderating effects of CEO ownership on cash holdings and firm value. Many firms have continued to increase the level of cash holdings as one of the risk management strategies after the 2008 financial crisis in U.S. and 2011 financial crisis in Europe. For these firms, this study also has an important implication that CEO ownership may be able to enhance firm value. The findings make an important contribution by validating the relationships between CEO ownership and cash holding.