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