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Analysts and Corporate Liquidity Policy


Abstract This paper examines how equity analysts' roles as information intermediaries and monitors affect corporate liquidity policy and its associated value of cash, providing new evidence that analysts have a direct impact on corporate liquidity policy. Greater analyst coverage (1) reduces information asymmetry between a firm and outside shareholders and (2) enhances the monitoring process. Consistent with these arguments, analyst coverage increases the value of cash, thereby allowing firms to hold more cash. The cash-to-assets ratio increases by 5.2 percentage points when moving from the bottom analyst-coverage decile to the top decile. The marginal value of $1 of corporate cash holdings is $0.93 for the bottom analyst-coverage decile and $1.... (more)
Created Date 2012
Contributor Chang, Ching-Hung (Author) / Bates, Thomas (Advisor) / Bharath, Sreedhar (Committee member) / Lindsey, Laura (Committee member) / Arizona State University (Publisher)
Subject Finance / analyst / cash holdings / information asymmetry / intermediaries / monitoring / private firms
Type Doctoral Dissertation
Extent 102 pages
Language English
Copyright
Reuse Permissions All Rights Reserved
Note Ph.D. Business Administration 2012
Collaborating Institutions Graduate College / ASU Library
Additional Formats MODS / OAI Dublin Core / RIS


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Description Dissertation/Thesis