主 题:Earnings Transparency and Corporate Cash Holdings
内容简介:This paper examines the impact of earnings transparency on corporate cash holdings. Motivated by Barth et al. (2013), who show that firms with less earnings transparency tend to have higher cost of equity, this paper shows that the cross-section differences in earnings transparency cause variations in firm cash holdings because firms with less earnings transparency have more incentives to hold cash to avoid costly external financing and vice versa. Using data of US firms from 1980 to 2013, it is found that earnings transparency is significantly negatively associated with cash reserves. This impact remains significant when corporate governance measures and accounting-based earnings quality measures are accounted for. I attribute this impact to the precautionary motivation due to financial frictions associated with earnings transparency by showing that this impact is more pronounced in firms with more growth opportunities, higher information asymmetry (proxied by R&D expenses) and more financial constraints. Furthermore, it is found that firm with lower earnings transparency have a higher value of cash holdings and vice versa, which is consistent with precautionary motivation story
报告人:Liu Chenxi 博士
时 间:2018-11-29 09:30
地 点:位育楼117
举办单位:银行与货币研究院
