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132848

The Impact of corporate governance and free cash flow on over-investment Empirical Evidence from Egypt

Article

Last updated: 04 Jan 2025

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Subjects

-

Tags

علوم المحاسبة وإدارة الأعمال

Abstract

Abstract This study explores the impact of corporate governance and free cash on over-investment. Based on a sample of 80 firms in the Egyptian business environment during the period 2012 to 2016. The full sample is divided into subsamples: over-investment firms and under-investment firms then focus on over-investment firms only. For over-investment firms, the study indicates that board duality and audit committee size have a positive effect on over-investment, whereas board independence and managerial ownership do not have an effect on over-investment. The results of these study investigations also show that there is positive and significant relationship between free cash flow and over-investment. In other words free cash flow may increase over-investment. It can be implied according to these finding that free cash flow is deemed as a key factor in creating over-investment and it leads to the occurrence of some agency problems of information asymmetry issues. These results are consist with findings from (Yang and Jiang, 2008) , (Biddle et al., 2009), (Richordson,2007) and (Chen et al.,2016). Shareholders, owners and investors in Egyptʼs capital market are recommended to pay attention to the factor of free cash flow upon evaluation of investment and include this factors in their decision making models.

DOI

10.21608/zcom.2020.132848

Keywords

Keywords: corporate governance. Free cash flow. Over, investment

Authors

First Name

محمد السعيد

Last Name

أبوالعز

MiddleName

-

Affiliation

قسم المحاسبة، کلية التجارة، جامعة الزقازيق، مصر

Email

-

City

القاهرة

Orcid

-

First Name

رمضان عطية

Last Name

حسن

MiddleName

-

Affiliation

قسم المحاسبة، کلية التجارة، جامعة الزقازيق، مصر

Email

-

City

الزقازيق

Orcid

-

First Name

أسماء أحمد إبراهيم

Last Name

أحمد

MiddleName

-

Affiliation

قسم المحاسبة، کلية التجارة، جامعة الزقازيق، مصر

Email

-

City

أبوحماد

Orcid

-

Volume

42

Article Issue

4

Related Issue

18272

Issue Date

2020-10-01

Receive Date

2020-12-27

Publish Date

2020-10-01

Page Start

23

Page End

53

Print ISSN

1110-7731

Online ISSN

2735-4512

Article File

ZCOM_Volume 42_Issue 4_Pages 23-53.pdf

PDF . 423.2kB

Link

https://zcom.journals.ekb.eg/article_132848.html

Detail API

https://zcom.journals.ekb.eg/service?article_code=132848

Order

8

Type

تجاریة کل ما یتعلق بالعلوم التجاریة

Type Code

1,572

Publication Type

Journal

Publication Title

مجلة البحوث التجارية

Publication Link

https://zcom.journals.ekb.eg/

MainTitle

The Impact of corporate governance and free cash flow on over-investment Empirical Evidence from Egypt

Details

Type

Article

Created At

23 Jan 2023