Corporate governance and the value of cash holdings.

  title={Corporate governance and the value of cash holdings.},
  author={A. Dittmar and Jan Mahrt-Smith},
  journal={Journal of Financial Economics},
  • A. Dittmar, Jan Mahrt-Smith
  • Published 2007
  • Business
  • Journal of Financial Economics
  • In this paper, we investigate how corporate governance impacts firm value by examining both the value and the use of cash holdings in poorly and well governed firms. Cash represents a large and growing fraction of corporate assets and generally is at the discretion of management. We use several measures of corporate governance and show that governance has a substantial impact on firm value through its impact on cash: $1.00 of cash in a poorly governed firm is valued by the market at only $0.42… CONTINUE READING
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