Impact of Cash Holdings on Firm Value: Role of Election Induced Political Uncertainty

IF 0.7 Q4 BUSINESS, FINANCE

Asian Academy of Management Journal of Accounting and Finance Pub Date : 2023-06-22 DOI:10.21315/aamjaf2023.19.1.2

Omar Farooq, Zakir Pashayev

引用次数: 0

Abstract

This paper uses presidential elections as the proxy for political uncertainties to investigate the impact of election induced political uncertainties on the relationship between cash holdings and firm value for a sample of non-financial firms from the U.S. The findings suggest that the impact of cash holdings on firm value goes down significantly during the years of presidential elections. This finding, however, is confined only to elections in which both presidential candidates are new and for firms headquartered in the states that have always voted for the Democrat candidates in the presidential elections. Furthermore, our findings suggest that the impact of political uncertainties on the relationship between cash holdings and firm value does not hold for gubernatorial elections. Our results are robust after including number of firm-specific and country-specific control variables and after taking into account potential endogeneity concerns.

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现金持有量对企业价值的影响:选举引发的政治不确定性的作用

本文利用总统选举作为政治不确定性的代理，对美国非金融公司样本的选举引发的政治不确定性对现金持有量与公司价值之间关系的影响进行了研究。研究结果表明，在总统选举期间，现金持有量对公司价值的影响显著下降。然而，这一发现仅限于两位总统候选人都是新候选人的选举，以及总部位于在总统选举中一直投票给民主党候选人的州的公司。此外，我们的研究结果表明，政治不确定性对现金持有量和公司价值之间关系的影响不适用于州长选举。在考虑了一些特定于企业和国家的控制变量并考虑了潜在的内生性问题后，我们的结果是稳健的。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Asian Academy of Management Journal of Accounting and Finance BUSINESS, FINANCE-

CiteScore

1.50

自引率

0.00%

发文量

审稿时长

20 weeks

期刊介绍： To provide a forum for the exchange of ideas and dissemination of empirical findings and analytical research in the specialized areas of accounting and finance with special emphasis on scholarly works with policy implications for countries in the Asia Pacific. The following are some of the topical subject areas relevant to the journal (but are not limited to): Accounting • Financial reporting and accounting standards • Auditing issues • Value based accounting and its relevance • Theory of accounting firm • Environmental auditing • Corporate governance issues • Public sector accounting Finance • Valuation of financial assets • International capital flows • Ownership and agency theory • Stock market behavior • Investment and portfolio management • Islamic banking and finance • Microstructures of financial markets