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/lp/oxford-university-press/international-evidence-on-cash-holdings-and-expected-managerial-agency-4yW2kG868r
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- Publisher
- Oxford University Press
- Copyright
- Copyright © The Author 2007. Published by Oxford University Press on behalf of The Society for Financial Studies.
- Subject
- Articles
- ISSN
- 0893-9454
- eISSN
- 1465-7368
- DOI
- 10.1093/rfs/hhm023
- Publisher site
- See Article on Publisher Site
Abstract
This article uses managerial control rights data for over 5000 firms from 31 countries to examine the net costs and benefits of cash holdings. We find that when external country-level shareholder protection is weak, firm values are lower when controlling managers hold more cash. Further, when external shareholder protection is weak we find that firm values are higher when controlling managers pay dividends. Only when external shareholder protection is strong do we find that cash held by controlling managers is unrelated to firm value, consistent with generally prevailing U.S. and international evidence.
Journal
The Review of Financial Studies – Oxford University Press
Published: Jul 16, 2007
Keywords: JEL G32 G34 G35