National culture and corporate cash holdings around the world

Chen, Yangyang; Dou, Paul; Rhee, S. Ghon; Truong, Cameron; Veeraraghavan, Madhu

doi:10.1016/j.jbankfin.2014.09.018

Cited by 279 publications

(294 citation statements)

References 101 publications

(133 reference statements)

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“…12 See, also, Guiso, Sapienza, and Zingales (2006), Li, Griffin, Yue, and Zhao (2013), Chui, Titman, and Wei (2010), Titman, Wei, and Xie (2013), Siegel, Licht, andSchwartz (2013), Ferris, Jayaraman, andSabherwal (2013), Pan and Pirinsky (2015), Chen, Podolski, Rhee, and Veeraraghavan (2014), and Chen, Dou, Rhee, Truong, and Veeraraghavan (2015). 13 CIQ attempts to make the data consistent across countries; however, such an effort has obvious limitations due to differences in accounting practices across countries.…”

Section: Cross-country Comparisons Of Executive Compensation and mentioning

confidence: 99%

CEO Tournaments: A Cross-Country Analysis of Causes, Cultural Influences, and Consequences

Burns¹,

Minnick

Starks

2017

J. Financ. Quant. Anal.

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Using a cross-country sample, we examine the chief executive officer (CEO) tournament structure (measured alternatively as the ratio and the difference of pay between the CEO and other top executives within a firm). We find the tournament structure to vary systematically with firm and country cultural characteristics. In particular, firm size and the cultural values of power distance, fair income differences, and competition are significantly associated with variations in tournament structures. We also establish support for the primary implication of tournament theory in that tournament structure tends to be positively related to firm value, even after controlling for endogeneity.

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Section: Cross-country Comparisons Of Executive Compensation and mentioning

confidence: 99%

CEO Tournaments: A Cross-Country Analysis of Causes, Cultural Influences, and Consequences

Burns¹,

Minnick

Starks

2017

J. Financ. Quant. Anal.

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“…A notable exception is Chen et al (2015), using national cultural characteristics, they report that cash holdings have a negative association with individualism and a positive association with uncertainty avoidance. Further research could analyse other individual characteristics.…”

Section: Conclusion and Future Researchmentioning

confidence: 99%

Corporate cash holdings: Causes and consequences

Amess

Banerji

Lampousis

2015

International Review of Financial Analysis

126

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The considerable growth in corporate cash holdings around the world has prompted scholarly interest. Consequently, there is now a large academic literature examining cash holdings and their impact on corporate outcomes and firm values. This article reviews and synthesizes the literature to offer insight into two primary motives to hold cash: precautionary and agency. We first present a stylized model that explores the trade-off in holding cash between these two motives and then examine empirical studies to determine how existing theories are supported by evidence using data from a variety of countries. In addition, we examine the effectiveness of a variety of corporate governance devices in curtailing cash holdings and also the extent to which these devices offer investors' confidence that cash will not be wasted. Finally, we discuss methodological and measurement issues associated with empirical cash holdings studies. JEL classification: G30; G32

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“…Last but not least, we can also contribute to the literature focusing on cross-country differences in corporate cash holdings examining whether investor preferences can explain cross-country differences in the valuation of cash holdings and in cash policies besides investor protection (Dittmar and Marth-Smith, 2007), the development of credit markets (see, e.g., Lins et al, 2010) or cultural aspects (see, e.g., Chen et al, 2013).…”

Section: Introductionmentioning

confidence: 99%

Ambiguity Aversion and Cash Holdings

2013

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Abstract. Previous literature on cash management has revealed that cash holdings are treated like an insurance policy against liquidity shocks that limit future profitable investments. In a theoretical model based on this finding, we analyze how investors' attitude towards uncertain investment returns affects the valuation of cash and the amount of cash holdings. Consequently, we show empirically in a panel analysis that cash holdings indeed become less valuable with increasing ambiguity aversion. In line with the other studies from the catering literature, we also demonstrate that managers react accordingly and lower cash holdings if their investors are ambiguity averse. With several robustness tests we also address potential doubts concerning the quality of our data and analyze further implications of our theory. JEL Classification: A12, D03, G35, Z10Keywords: Ambiguity aversion, behavioral decision theory, cash policy, corporate finance. Ambiguity Aversion and Cash Holdings 05/08/2013Abstract. Previous literature on cash management has revealed that cash holdings are treated like an insurance policy against liquidity shocks that limit future profitable investments. In a theoretical model based on this finding, we analyze how investors' attitude towards uncertain investment returns affects the valuation of cash and the amount of cash holdings. Consequently, we show empirically in a panel analysis that cash holdings indeed become less valuable with increasing ambiguity aversion. In line with the other studies from the catering literature, we also demonstrate that managers react accordingly and lower cash holdings if their investors are ambiguity averse. With several robustness tests we also address potential doubts concerning the quality of our data and analyze further implications of our theory.JEL Classification: A12, D03, G35, Z10

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National culture and corporate cash holdings around the world

Cited by 279 publications

References 101 publications

CEO Tournaments: A Cross-Country Analysis of Causes, Cultural Influences, and Consequences

CEO Tournaments: A Cross-Country Analysis of Causes, Cultural Influences, and Consequences

Corporate cash holdings: Causes and consequences

Ambiguity Aversion and Cash Holdings

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