• DOI:10.1016/J.JFINECO.2007.04.002
Corpus ID: 281382

Corporate governance and firm cash holdings in the US

@article{Harford2008CorporateGA,
  title={Corporate governance and firm cash holdings in the US},
  author={J. Harford and Sattar Mansi and W. Maxwell},
  journal={Journal of Financial Economics},
  year={2008},
  volume={87},
  pages={535-555}
}

J. Harford, Sattar Mansi, W. Maxwell

Published 2008

Business

Journal of Financial Economics

Using governance metrics based on antitakeover provisions and inside ownership, we find that firms with weaker corporate governance structures actually have smaller cash reserves. When distributing cash to shareholders, firms with weaker governance structures choose to repurchase instead of increasing dividends, avoiding future payout commitments. The combination of excess cash and weak shareholder rights leads to increases in capital expenditures and acquisitions. Firms with low shareholder… CONTINUE READING

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