Cash Holdings and Labor Heterogeneity: The Role of Skilled Labor

Ghaly, Mohamed; Dang, Viet Anh; Stathopoulos, Konstantinos

doi:10.1093/rfs/hhx045

Cited by 185 publications

(89 citation statements)

References 88 publications

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“…Firm size effects are incorporated through the Total Assets variables, which is used as a normalizing variable in the cash equation. Additional firm-specific effects on working capital that are not already captured by the intercepts (i.e., time-varying effects) are included through several control variables that have been tested in prior literature (see, e.g., Ghaly et al 2017;Harford et al 2014;Kulchania and Thomas 2017). These control variables, along with the expected direction of their impact on cash holdings include:…”

Section: Research Design and Model Formulationmentioning

confidence: 99%

Corporate brand value and cash holdings

2020

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This research devotes theoretical and empirical attention to the understudied relationship between corporate brand value and cash holdings. We draw on existing firm valuation theorizing at the marketing-finance interface to propose that branding can alter the probability distribution of the firm's revenues, lower potential operating shortfalls (negative operating earnings), and thereby reduce the firm's cash holdings. The negative corporate brand value-cash holdings relationship is empirically tested using Brand Finance's brand valuation metric as the predictor. Based on a pooled cross-section time-series design of up to 115 firms across 10 years, we find: that (1) support for the predicted negative association between brand value and cash holdings and (2) that the long-term cash holdings elasticity of brand value is between − 0.16 and − 0.22. Interestingly, these results are not replicated when using a traditional consumer-based brand equity measure. This study informs the debate on whether and how brand assets can impact firm cash holdings, reaffirms that results are sensitive to the operationalization of brand assets, and recognizes a new role for brands-as a "downside risk" (not variance) management tool for the top management team. An overarching implication of this research is that brands should be viewed as a firm-wide strategic asset with a sphere of influence that transcends the marketing function.

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Section: Research Design and Model Formulationmentioning

confidence: 99%

Corporate brand value and cash holdings

2020

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“…We also control for potential industry‐fixed and time‐fixed effects in all regressions. Robust standard errors are clustered on the industry level (Ghaly, Dang, & Stathopoulus, ; Graham, Hanlon, Shevlin, & Shroff, ) as we argue that firms within industries are more alike than firms within countries. We calculate the pseudo R 2 using the approach of McKelvey and Zavoina ().…”

Section: Datamentioning

confidence: 96%

Determinants of discounts in equity rights issues: An international comparison

2019

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Equity rights offerings are the predominant SEO flotation method in many European and Asian countries. Several previous studies focus on rights offerings, but these studies often measure solely the announcement effects of these offerings and pay little attention to the discount. This study seeks to close this gap, explain the discounts on such rights offerings, and determine the drivers of offering discounts with a focus on cultural effects regarding the level of uncertainty avoidance. Based on the existing literature, we develop several hypotheses and find supporting evidence for these hypotheses in our data. Our main finding is that the most important factors for explaining the discount on an equity rights offer are the level of uncertainty avoidance, the quality of a firm, and the level of uncertainty about firm value.

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“…Additionaly, an increasing number of studies have focused on non-financial determinants of corporate cash holdings. Examples of such factors are product market dynamics, organizational structure of the firm, nature of supplier-buyer relationships, family control, level of multinationality and dependence on skilled labor (Subramaniam, Tang, Yue, & Zhou, 2011;Itzkowitz, 2013;Duran, Lozano, & Yaman, 2016;Fernandes & Gonenc, 2016;Haushalter, Klasa, & Maxwell, 2007;Ghaly, Dang, & Stathopoulos, 2017). Wu et al's (2012) paper remains the only study that addresses cash holdings consequences of trade credit provision.…”

Section: Cash Holdings Literaturementioning

confidence: 99%

Does volatility of trade receivables affect corporate cash holdings Empirical evidence from Turkey

Adiguzel¹

2019

Pressacademia

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Purpose -This study aims to analyze the direct impact of trade receivables volatility on corporate cash holdings. Unlike previous studies, the present paper focuses on variability of a firm's investment in trade credit which proxies instability of a firm's trade receivables policy. Methodology -The sample is composed of 330 Turkish industrials listed on Borsa Istanbul from 2000 to 2017. The model is estimated via system GMM (Generalized Method of Moments) to account for the partial adjustment process towards the target cash level and also to address the potential endogeneity issue related with volatility of trade receivables. Findings-Estimations establish a significant negative effect of trade receivables volatility on cash holdings. The results are robust to alternative definitions of cash holdings and trade receivables volatility. Conclusion -The evidence presented in this study suggests that instability of trade receivables policy weakens liquidity position of firms.

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Cash Holdings and Labor Heterogeneity: The Role of Skilled Labor

Cited by 185 publications

References 88 publications

Corporate brand value and cash holdings

Corporate brand value and cash holdings

Determinants of discounts in equity rights issues: An international comparison

Does volatility of trade receivables affect corporate cash holdings Empirical evidence from Turkey

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