Corporate governance and the value of cash holdings

• 成果类型: Article
• 署名作者: Dittmar, Amy; Mahrt-Smith, Jan
• 署名单位: University of Michigan System; University of Michigan; University of Toronto
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2005.12.006
• 发表日期: 2007
• 页码: 599-634
• 关键词: CASH HOLDINGS; corporate governance; Ownership structure; take-over provisions; Firm value

摘要

We investigate how corporate governance impacts firm value by comparing the value and use of cash holdings in poorly and well-governed firms. We show that governance has a substantial impact on value through its impact on cash: $1.00 of cash in a poorly governed firm is valued at only $0.42 to $0.88. Good governance approximately doubles this value. Furthermore, we show that firms with poor corporate governance dissipate cash quickly in ways that significantly reduce operating performance. This negative impact of large cash holdings on future operating performance is cancelled out if the firm is well governed. (c) 2006 Elsevier B.V. All rights reserved.