The aim of the study was to examine the impact of corporate governance practices on firm's\ncash holdings of listed manufacturing companies in Sri Lanka, using panel data extracted\nfrom the financial statements of the companies listed on Colombo Stock Exchange. Corporate\ngovernance practices of Sri Lankan listed manufacturing companies were measured by board\nindependence, board size, CEO duality, audit committee meetings and audit committee\nmembers, cash holdings were measured by percentage of cash and cash equivalents on total\nassets and also leverage and firm size were considered as control variables. Data were\ncollected from 26 listed manufacturing companies over a five years period of 2011-2015.\nPooled Ordinary Least Square, Fixed Effect and Random Effect models were performed\nusing STATA to explore the best model for the impact of corporate governance practices on\nfirm's cash holdings. Results of the study revealed that fixed effect model was the best model\nwith the evidence of Hausman specification test. According to the fixed effect model,\nCEO-duality and leverage had significant negative impact on cash holdings while audit\ncommittee meetings and firm size had positive impact on cash holdings of the listed\nmanufacturing companies in Sri Lanka. Board independence, board size and audit committee\nmembers did not show any significant impact on cash holdings. Findings of the study may be\nuseful to practitioners to identify the effects of corporate governance practices on firm's cash\nholdings.
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