教師資料查詢 | 類別: 期刊論文 | 教師: 張瑀珊 Chang, Yu-shan (瀏覽個人網頁)

標題:Over-investment, the marginal value of cash holdings and corporate governance
學年103
學期2
出版(發表)日期2015/04/01
作品名稱Over-investment, the marginal value of cash holdings and corporate governance
作品名稱(其他語言)
著者Huang, Chih Jen; Liao, Tsai-Ling; Chang, Yu-Shan
單位
出版者
著錄名稱、卷期、頁數Studies in Economics and Finance 32(2), pp.204-221
摘要Purpose
– The purpose of this paper is to examine how investors’ valuation of cash holdings is related to firm-level investment.

Design/methodology/approach
– As prior studies note that holding excess cash serve as a driver to would be over-investing, and that over-investment imposes substantial agency costs on shareholders, the authors focus on the value implications of holding cash in the presence of over-investment from the perspective of shareholders.

Findings
– By examining the publicly traded companies on Taiwan stock market, the authors uncover that cash is valued less in firms with over-investment than in those with under-investment and the magnitude of over-investment is negatively related to the marginal value of cash holdings (MVCH). It reveals that investment activities impact the value that shareholders place on cash holdings. Moreover, further tests indicate that higher block holdings and the presence of independent directors on boards can effectively mitigate the negative impact of over-investment on the MVCH.

Practical implications
– This paper enhances the understanding of the valuation implications of cash reserves held by firms with over-investment and the effectiveness of governance structures in containing the detrimental effect of investment-related agency costs on the value of holding cash.

Originality/value
– This paper provides pioneering evidence that outside investors discount cash assets in over-investing firms to reflect their expectations that they will not receive the full benefit of these assets; and this paper extends the literature on corporate governance by assessing the role of governance mechanisms in reversing the negative relation between over-investment and the MVCH.
關鍵字Corporate governance;Cash holdings;Agency costs;Over-investment
語言英文
ISSN1086-7376
期刊性質國外
收錄於
產學合作
通訊作者
審稿制度
國別英國
公開徵稿
出版型式,電子版,紙本
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