Product Market Threats, Payouts, and Financial Flexibility

• 成果类型: Article
• 署名作者: Hoberg, Gerard; Phillips, Gordon; Prabhala, Nagpurnanand
• 署名单位: University System of Maryland; University of Maryland College Park; University of Southern California; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12050
• 发表日期: 2014
• 页码: 293-324
• 关键词: IDIOSYNCRATIC VOLATILITY; DISAPPEARING DIVIDENDS; information-content; cash; COMPETITION; POLICY; debt; propensity; earnings; IMPACT

摘要

We examine how product market threats influence firm payout policy and cash holdings. Using firms' product text descriptions, we develop new measures of competitive threats. Our primary measure, product market fluidity, captures changes in rival firms' products relative to the firm's products. We show that fluidity decreases firm propensity to make payouts via dividends or repurchases and increases the cash held by firms, especially for firms with less access to financial markets. These results are consistent with the hypothesis that firms' financial policies are significantly shaped by product market threats and dynamics.