Cash holdings, board governance characteristics, and Egyptian firms’ performance

Figures & data

Table 1. The final sample categorization by industrial type.

Initial sample			100
(-) Financial firms			(20)
Non-financial firms			80
(-) Firms with incomplete data			(28)
Final sample			52
Study time frame			7
Total observations			364
Industry	Firms	Observations	%
Food and beverages	11	77	21.1
Constructions	6	42	11.5
Industrial	4	28	7.7
Tourism	5	35	9.6
Real estates	7	49	13.4
Chemicals	3	21	5.8
Basic resources	3	21	5.8
Textiles and durable goods	3	21	5.8
Media	1	7	1.9
IT & Communication Services	3	21	5.8
Trade and distributors	3	21	5.8
Healthcare	3	21	5.8
Total	52	364	100%

Table 2. Variables definitions.

Variables	Definition
Dependent variable
Firm performance
(ROA)	Net income/total assets.
(ROE)	Net income/total equity.
Independent variables
Cash holdings (cash)	Cash and cash equivalents/total assets.
Board size (BSZ)	The Aggregate Count of Board Members.
Board independence (bind)	The number of non-executive independent directors on the board.
Role duality (DUAL)	A dichotomous variable coded as 1 if the Chief Executive Officer is the also Board Chair, and 0 otherwise
BGD (Bdiversity)	The ratio of women directors on the board.
Board frequency meetings (Bmeet)	Aggregate count of board Meetings held throughout a fiscal year.
Control variables
Firm size (FSZ)	Log of total assets.
Net working capital (NWC)	Subtracting current liabilities and cash and cash equivalents from current assets, and then dividing the result by total assets.
Cash flow (CF)	Dividing earnings before interest, dividends, and taxes (but before depreciation) by total assets.

Table 3. Descriptive statistics.

Variables	N	Min	Max	Mean	SD
ROA	364	−0.248	0.550	0.0492	0.0893
ROE	364	−0.155	0.316	0.066	0.120
Cash	364	−1.3410	1.5280	0.1046	0.2317
BSZ	364	4.00	17.00	8.71	2.808
Bind	364	1.00	15.00	6.52	2.555
DUAL	364	0.00	1.00	0.555	0.498
Bdiversity	364	0.00	0.500	0.0973	0.1177
Bmeet	364	2.00	20.00	7.09	3.201
FSZ	364	17.188	23.796	20.3095	1.6629
NWC	364	−0.8192	0.9920	0.1738	0.2708
CF	364	−0.35	0.38	0.0339	0.0916

Table 4. Correlation matrix.

Variable	ROA	ROE	Cash	BSZ	Bind	DUAL	Bdiversity	Bmeet	FSZ	NWC	CF	VIF
ROA	1											–
ROE	0.825***	1
Cash	0.269***	0.190***	1									1.143
BSZ	0.151***	0.185***	−0.064	1								1.668
Bind	0.036	0.112**	−0.053	0.371**	1							1.424
DUAL	0.017	−0.047	−0.134*	0.034	−0.045	1						1.071
Bdiversity	0.181***	0.167***	0.224**	0.295**	0.297**	0.151**	1					1.234
Bmeet	0.024	0.055	0.074	0.126*	0.156**	0.112*	0.257**	1				1.108
FSZ	0.072	0.156***	−0.086	0.332**	0.205**	−0.051	−0.048	0.003	1			1.033
NWC	0.354**	0.299**	0.299**	−0.112*	−0.095	0.071	−0.003	−0.087	−0.177**	1		1.128
CF	0.421**	0.301**	0.200**	0.095	0.046	−0.059	0.162**	−0.036	−0.027	0.041	1	1.042

Notes: ***, **, and * reflect significance at 1, 5, and 10% levels, respectively.

Table 5. Results of OLS regression.

Variables	Model 1				Model 2
	ROA (1.1)		ROE (1.2)		ROA (2.1)		ROE (2.2)
	Coef	t-Stat	Coef	t-Stat	Coef	t-Stat	Coef	t-Stat
Cash	0.055	2.95***	0.059	2.39**	—	—	—	—
BSZ	—	—	—	—	0.079	2.10**	0.013	0.22
Bind	—	—	—	—	−0.011	−1.99**	−0.001	−0.23
DUAL	—	—	—	—	−0.005	−0.42	−0.007	−0.38
Bdiversity	—	—	—	—	0.111	2.14**	0.185	2.26**
Bmeet	—	—	—	—	0.019	1.64	0.033	1.98**
FSZ	0.009	2.38**	0.022	3.59***	0.006	1.80*	0.022	3.37***
NWC	0.086	4.72***	0.105	4.18***	0.101	5.65***	0.120	4.81***
CF	0.255	6.68***	0.213	4.45***	0.259	6.76***	0.220	4.62***
Cons	−0.158	−2.10**	−0.407	−3.30***	−0.269	−3.19***	−0.518	−3.64***
Industry&Year FE	Yes		Yes		Yes		Yes
R^2	0.310		0.198		0.352		0.217
F-value	86.57***		55.72***		92.51***		61.27***
Observation	364		364		364		364

Notes: ***, **, and * reflect significance at 1, 5, and 10% levels, respectively.

Table 6. Results of two-step system GMM analysis.

Variables	Model 1				Model 2
	ROA		ROE		ROA		ROE
	Coef	t-Stat	Coef	t-Stat	Coef	t-Stat	Coef	t-Stat
ROAt-1	0.251	2.67***	—	—	0.250	3.09***	—	—
ROEt-1	—	—	0.368	4.09***	—	—	0.365	3.86***
Cash	0.318	2.02**	0.171	1.98**	—	—	—	—
BSz	—	—	—	—	0.014	3.79***	0.009	0.91
Bind	—	—	—	—	−0.012	−3.04***	−0.006	−1.17
DUAL	—	—	—	—	−0.007	−0.79	−0.014	−1.09
Bdiversity	—	—	—	—	0.106	2.00**	0.144	1.97**
Bmeet	—	—	—	—	0.002	0.52	0.004	2.07**
FSZ	0.008	2.57**	0.006	1.83*	0.003	1.00	0.002	0.61
NWC	0.028	0.59	0.055	1.04	0.049	1.79*	0.013	0.34
CF	0.203	1.37	0.040	1.25	0.034	0.34	0.152	0.94
Cons	−0.166	−2.27**	−0.102	−1.25	−0.061	−1.00	−0.018	−0.20
Industry&Year FE	Yes		Yes		Yes		Yes
F-value	164.71***		248.81***		282.63***		264.53***
AR (1)	−3.07***		−4.43***		−3.69***		−4.19***
AR (2)	−0.54		−0.13		1.11		−0.22
Sargan test	6.61		7.07		7.03		6.93
Hansen test	7.23		5.26		6.26		3.85
Observation	364		364		364		364

Notes: ***, **, and * reflect significance at 1, 5, and 10% levels, respectively.

Table 7. Results of regression analysis utilizing alternative measures of independent variables.

Variables	Model 1				Model 2
	ROA		ROE		ROA		ROE
	Coef	t-Stat	Coef	t-Stat	Coef	t-Stat	Coef	t-Stat
LNCash	0.103	3.36**	0.125	3.07***	—	—	—	—
LNBSZ	—	—	—	—	0.002	1.89*	0.002	0.11
Bind	—	—	—	—	−0.020	−1.95*	−0.056	−0.88
DUAL	—	—	—	—	−0.009	−0.10	−0.068	−0.45
Bdiversity	—	—	—	—	0.031	2.72***	0.042	2.61***
LNBmeet	—	—	—	—	0.002	1.39	0.003	1.83*
FSZ	0.009	2.44***	0.022	3.68***	0.008	2.01**	0.023	3.51***
NWC	0.080	4.29***	0.098	3.85***	0.102	5.62***	0.123	4.92***
CF	0.333	5.83***	0.187	3.72***	0.250	6.54***	0.216	4.52***
Cons	−0.169	−2.18**	−0.421	−3.41***	−0.168	−1.80*	−0.543	−3.62***
Industry&Year FE	Yes		Yes		Yes		Yes
R^2	0.304		0.190		0.314		0.192
F-value	86.78***		59.38***		86.42***		62.34***
Observation	364		364		364		364

Notes: ***, **, and * reflect significance at 1, 5, and 10% levels, respectively.

Table 8. Results of fixed effects approach.

Variables	Model 1				Model 2
	ROA		ROE		ROA		ROE
	Coef	t-Stat	Coef	t-Stat	Coef	t-Stat	Coef	t-Stat
Cash	0.036	1.99**	0.063	2.44**	—	—	—	—
BSZ	—	—	—	—	0.013	4.17***	0.120	1.13
Bind	—	—	—	—	−0.012	−3.78***	−0.021	−1.56
DUAL01	—	—	—	—	−0.005	−0.70	−0.041	−1.02
Bdiversity%	—	—	—	—	0.081	2.25**	0.334	2.44**
Bmeet	—	—	—	—	0.001	0.74	0.044	2.24**
FSZ	0.008	3.32***	0.065	4.35***	0.005	1.89*	0.068	4.57***
NWC	0.111	7.26***	0.077	2.65***	0.122	8.52***	0.093	3.24***
CF	0.389	8.87***	0.189	3.95***	0.366	8.48***	0.220	4.56***
Cons	−0.148	−3.01***	−0.289	−4.22***	−0.124	−2.47**	−0.369	−4.09***
Firm&Year FE	Yes		Yes		Yes		Yes
R^2	0.321		0.083		0.359		0.085
F-value	42.32***		11.98***		24.97***		7.51***
Observation	364		364		364		364

Notes: ***, **, and * reflect significance at 1, 5, and 10% levels, respectively.

Data availability statement

Data are available upon request from researchers who meet the eligibility criteria. Kindly contact the corresponding author privately through e-mail.