Corpus ID: 197679245

Industry Tournament Incentives and the Strategic Value of Corporate Liquidity

@inproceedings{Huang2015IndustryTI,
  title={Industry Tournament Incentives and the Strategic Value of Corporate Liquidity},
  author={Jian Huang and Bharat A. Jain and Omesh Kini},
  year={2015}
}
We evaluate the link between CEO industry tournament incentives (ITI) and the strategic value of corporate liquidity. We find that ITI increase the level and marginal value of cash holdings even after conducting several tests to control for endogeneity. Additionally, for firms with excess cash, higher ITI lead to increased R&D expenditures and spending on focused acquisitions, and reduced shareholder payouts. Furthermore, ITI strengthen the relation between firm cash holdings and market share… Expand
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