Free Cash Flow and Takeover Threats: An Experimental Study.
A classic theory of corporate governance holds that when cash flow is high and investment opportunities scarce, takeover threats reduce managerial self-dealing and encourage dividend payment to owners. I conduct laboratory experiments studying the effect of cash flow on self-dealing and the effect o...
| Publicado en: | Southern Economic Journal Vol. 75; no. 2; pp. 351 - 367 |
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| Formato: | Artículo |
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Wiley-Blackwell
Oct2008
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=35132610&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 35132610 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00384038 SEJ jtl: Southern Economic Journal issn: 00384038 maglogo: N pubinfo: dt: Oct2008 vid: 75 iid: 2 pid: 480 pub: Wiley-Blackwell artinfo: ui: 35132610 10.1002/j.2325-8012.2008.tb00908.x ppf: 351 ppct: 16 formats: fmt: @attributes: type: P size: 4.2MB tig: atl: Free Cash Flow and Takeover Threats: An Experimental Study. aug: au: Oprea, Ryan affil: University of California, 1156 High Street, Santa Cruz, CA 95064, USA su: Industrial management Investments Corporate governance Mergers & acquisitions Cash flow Corporate finance Payment Cash management Net present value sug: subj: Industrial management Investments Consumer Lending Miscellaneous Financial Investment Activities Investment Advice Corporate governance Mergers & acquisitions Cash flow Corporate finance Payment Cash management Net present value ab: A classic theory of corporate governance holds that when cash flow is high and investment opportunities scarce, takeover threats reduce managerial self-dealing and encourage dividend payment to owners. I conduct laboratory experiments studying the effect of cash flow on self-dealing and the effect of takeover threats on both agency problems and the optimality of management of cash flows. I find that higher cash flow firms suffer more severe agency problems. Moreover I find that takeover threats reduce these problems in high cash flow firms but not low cash firms. Finally, I find evidence that takeover threats cause managers in low cash flow firms to make myopic withdraws to signal generosity. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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