The real implications of mimicking peer firms' cash holdings
Marvelous Kadzima,
Michael Machokoto,
Edward Chamisa
Abstract:PurposeThis study empirically examines the nonlinear effects of mimicking peer firms' cash holdings on shareholder value, with consideration of macroeconomic conditions.Design/methodology/approachAn instrumental variable approach for nonlinear models is estimated for a large sample of US firms over the period 1991–2019. This approach addresses the reflection problem in examining peer effects, whereby it is impossible to separate the individual's effects on the group, or vice versa, if both are simultaneously d… Show more
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