Jordan Journal of Economic Sciences, Volume 6, No.1, 2019 -65- © 2019 DAR Publishers/The University of Jordan. All Rights Reserved. Corporate Cash Holdings and Ownership Structure: A Quantile Regression Analysis Ghada Tayem, Mohammad Tayeh, Khawlah Abdallah Spetan 1 ABSTRACT This study examines the impact of ownership structure on firm cash policy in varying cash holding regimes, using 131 Jordanian nonfinancial firms listed on Amman Stock Exchange for the period 2005-2013. This study allows for the possibility that the impact of explanatory variables can vary for different levels of cash holdings by utilizing a quantile regression estimation method. The study revealed empirical evidence confirming that the impact of ownership concentration will differ according to the examined quantile. Furthermore, controlling shareholders are expected to overinvest in liquid assets that are not subject to market discipline and are less costly to turn into private benefits compared to other assets. However, the ability of controlling shareholders to do so may be affected by the level of cash holdings. Therefore, the positive association between cash holdings and ownership is expected to be elevated in high cash holding firms. The findings of this study show that in estimation methods that focus on the central tendency of the distribution, ownership is not significantly related to cash holdings. However, in a quantile regression model, the findings demonstrate that ownership becomes more positive and significant in upper quantiles. JEL classification:G30; G32; D92 Keywords: Cash holdings, quantile regression, agency problem, largest shareholder, Jordan. INTRODUCTION Under perfect capital market conditions, corporate liquidity is irrelevant because firms can raise external financing to meet unexpected changes in their cash flows or investment opportunity set at zero cost (Opler et al., 1999; Demiroglu and James, 2011; Denis, 2011; Almeida et al., 2014). However, due to transaction, information and agency costs associated with external financing cash may provide valuable financial flexibility to the firm (Opler et al., 1999; Almeida et al., 2004; Acharya et al., 2007; Denis, 2011). However, determining the optimal cash holdings level is difficult when there are concerns about the agency costs of holding cash. On the one hand, cash holdings preserve the firm’s flexibility to respond to unexpected needs (Kim et al., 1998; Opler et al., 1999; Almeida et al., 2004; Acharya et al., 2007; Denis, 2011). On the other hand, excess cash enables managers to pursue their own interests by spending it on value decreasing expenses and investments (Jensen & Meckling, 1976; Jensen, 1986; Harford et al., 2008). Therefore, different levels of cash holdings raise different concerns for shareholders of the firm. This study investigates the association between cash holdings and the ownership of the largest controlling shareholder for firms with different levels of cash holdings for nonfinancial Jordanian firms. Jordanian firms operate in an economy with low 1 School of Business, The University of Jordan, Jordan.  g.tayem@ju.edu.jo Received on 3/12/2017 and Accepted for Publication on 4/2/2018.