Corporate cash holdings: An empirical study of ownership identities on the Swedish market.

Abstract: Purpose: The main purpose of this study is to investigate whether different ownership identities has any effect on the levels of cash amongst firms listed on the Stockholm Stock Exchange (SSE) main markets. The examined types of owners are family owners, insider owners and institutional owners. Methodology: A quantitative approach with the interpretation of the results from a panel data regression. Theoretical framework: Agency Theory, Stewardship Theory, Theories related to the determinants of cash holdings, Theory of Ownership Identity Empirical foundation: A sample of 209 firms during the time period 2008-2013 Conclusions: We come to the conclusion that different types of owners have an impact on the cash levels in firms listed on the SSE main markets. Through or regression models we found statistical significant evidence that family owners and insider owners affect corporate cash holdings. The observed relationship between family owners and cash holdings contradicts previous research; besides this the results were in line with previous findings. The relationship between institutionally owned firms and cash holdings are weaker, raising the question whether institutions are as active as they are supposed to be when it comes to monitoring and disciplining of management.