a b s t r a c tThis paper examines whether cultural dimensions explain the variation in corporate cash holdings around the world as well as within the United States. We establish four major findings. First, in an international setting, corporate cash holdings are negatively associated with individualism and positively associated with uncertainty-avoidance. Second, individualism and uncertainty avoidance influence the precautionary motive for holding cash. Third, firms in individualistic states in the United States hold less cash than firms in collectivistic states. Fourth, we show that individualism is positively related to the firm's capital expenditures, acquisitions, and repurchases while uncertainty avoidance is negatively related. Our findings remain unchanged after controlling for governance factors, firm attributes, and country characteristics.
In recent years, the proportion of after-hours earnings announcements has increased to more than 40%. For after-hours announcements, earnings-related volume and price changes are not observed on the Compustat or I/B/E/S earnings announcement date, but one trading day later. This study demonstrates the importance of accounting for after-hours announcements for event studies around earnings announcements.
We investigate the effectiveness of standard event study procedures with Asia-Pacific security returns data. Monte Carlo simulation experiments reveal that standard event study test statistics often exhibit modest misspecification under a null hypothesis of no abnormal performance. This holds for both parametric and nonparametric tests. Test misspecification is severe with clustered event dates or a doubled event date returns variance.JEL Classification: C12, C14, C15, G14, G15
Conducting Event Studies With
Asia-Pacific Stock Market Data AbstractWe investigate the effectiveness of standard event study procedures with Asia-Pacific security returns data. Monte Carlo simulation experiments reveal that standard event study test statistics often exhibit modest misspecification under a null hypothesis of no abnormal performance. This holds for both parametric and nonparametric tests. Test misspecification is severe with clustered event dates or a doubled event date returns variance.
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