Publication Type
Journal Article
Version
acceptedVersion
Publication Date
9-2019
Abstract
This study examines how political connections influence the value of cash holdings in an international setting. The main finding reveals that political connections are not associated with the value of cash holdings in the overall sample. However, further analysis demonstrates that political connections are negatively associated with the value of cash holdings for firms inemerging markets and in countries with high levels of corruption. Moreover, the negative valuation of cash holdings is driven by firms that are connected through large shareholders. Overall, the findings provide new insights into the value relevance of cash holdings, especially for politically connected firms.
Keywords
Corruption, Political connections, Value of cash holding
Discipline
Accounting | Corporate Finance | Political Economy
Research Areas
Corporate Reporting and Disclosure
Publication
Finance Research Letters
Volume
30
First Page
96
Last Page
102
ISSN
1544-6123
Identifier
10.1016/j.frl.2019.03.035
Publisher
Elsevier
Citation
KUSNADI, Yuanto.
Political connections and the value of cash holdings. (2019). Finance Research Letters. 30, 96-102.
Available at: https://ink.library.smu.edu.sg/soa_research/1794
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.frl.2019.03.035