Agency conflicts and cash: : estimates from a dynamic model

• Autores: Boris Nikolov, Toni M. Whited
• Localización: The Journal of finance, ISSN 0022-1082, Vol. 69, Nº 5, 2014, págs. 1883-1921
• Idioma: inglés
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• Dialnet Métricas: 1 Cita
• Resumen

  • Which agency problems affect corporate cash policy? To answer this question, we estimate a dynamic model of finance and investment with three mechanisms that misalign managerial and shareholder incentives: limited managerial ownership of the firm, compensation based on firm size, and managerial perquisite consumption. We find that perquisite consumption critically impacts cash policy. Size-based compensation also matters, but less. Firms with lower blockholder and institutional ownership have higher managerial perquisite consumption, low managerial ownership is a key factor in the secular upward trend in cash holdings, and agency plays little role in small firms' substantial cash holdings.