Creditor rights and corporate cash holdings: International evidence

Kenneth Yung and Nadia A. Nafar

International Review of Economics & Finance, 2014, vol. 33, issue C, 111-127

Abstract: In this cross-country analysis, we find evidence of a positive relation between creditor rights and the level of corporate cash holdings. In addition, we find that the excess cash motivated by creditor rights has a significant negative impact on firm value. These relationships, however, are mitigated in countries that have stronger investor protection. The results are consistent with the interpretation that investors have concerns regarding the motives of holding cash when creditor rights are strong.

Keywords: Creditor rights; Cash holdings; Liquidity; Firm value; Investor protection (search for similar items in EconPapers)
JEL-codes: G15 G32 G33 G34 G35 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:33:y:2014:i:c:p:111-127

DOI: 10.1016/j.iref.2014.03.011

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