Firm-level political risk, liquidity management, and managerial attributes

Chunmi Jeon, Seongjae Mun and Seung Hun Han

International Review of Financial Analysis, 2022, vol. 83, issue C

Abstract: This study examines how firm-level political risk (FLPR) relates to excess cash holding and cash value. Managerial ability and psychological confidence are examined as moderators of these relationships. FLPR is measured by a computational linguistic analysis of firm conference call manuscripts. The findings indicate that FLPR has a positive (negative) relationship to excess cash (cash value) and that the managerial ability and CEO overconfidence of managers have a negative (positive) moderating effect on excess cash holdings (cash value). Robustness tests show consistent results using national-level policy uncertainty and alternative empirical models.

Keywords: Firm-level political risk; Cash holding; Cash value; CEO overconfidence; Managerial ability (search for similar items in EconPapers)
JEL-codes: G32 G38 G39 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:83:y:2022:i:c:s1057521922002411

DOI: 10.1016/j.irfa.2022.102285

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