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The market value of cash holdings from related-party sales: The role of source of cash flows
- Jung, Sun-Moon;
- Jung, Taejin;
- Kim, Natalie Kyung Won;
- Park, Sohee
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This paper finds that investors evaluate cash holdings differently based on the source of cash flows. Using cash flows from related-party sales as a proxy for diverse sources, we find that shareholders discount the value of cash holdings for firms with higher cash flows from related-party sales. We find that firms use related-party sales cash flows differently; cash flows from related-party sales are more likely to be retained as internal cash reserves or distributed as dividends, rather than utilised for necessary investments. We further document a negative valuation of investments for firms with more related-party sales.
키워드
corporate governance; market value of cash holdings; related-party transactions; resource allocation; source of cash flows; FINANCIAL STATEMENT COMPARABILITY; GROUP-AFFILIATED COMPANIES; CORPORATE GOVERNANCE; BUSINESS GROUPS; AGENCY COSTS; FIRMS HOLD; TRANSACTIONS; CONSTRAINTS; INFORMATION; INVESTMENT
- 제목
- The market value of cash holdings from related-party sales: The role of source of cash flows
- 저자
- Jung, Sun-Moon; Jung, Taejin; Kim, Natalie Kyung Won; Park, Sohee
- 발행일
- 2024-09
- 유형
- Article
- 권
- 64
- 호
- 3
- 페이지
- 2915 ~ 2948