The Marginal Value of Cash in Korean Retail Firms

• 발행기관: 한국유통과학회
• 저자명: Sang Su Kim Jeong Hwan Lee
• 간행물 정보: 『유통과학연구(JDS)』제14권 제2호, 13~22쪽, 전체 10쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2016.02.28

영문 초록

Purpose - We examine the marginal value of cash in Korean retail firms, largely unexamined in literature. The marginal value of cash plays pivotal role in cash management policy; especially, a significantly low marginal cash value indicates substantial manager-shareholder conflicts. Research design, data, and methodology - We estimate marginal cash values by adopting the approach of Faulkender & Wang (2006). The sample of retail firms traded in Korean Stock Exchange from 1991 to 2013 is analyzed. Results - We estimate the marginal value of cash for the retail firms as 0.75, implying significant manager-shareholder conflicts. We find a lower marginal value of cash for financially constrained retail firms, contradicting existing theories. The marginal value of cash increases substantially after 2000s, suggesting severe agency conflicts in 1990s as a key reason behind our findings. Conclusions - Our findings support the substantial resource diversion problem in Korean firms and the agency theory of cash management policy. Our results argue against the widely accepted view focusing on implications of financial constraints, which highlights a need of new cash management theory.

목차

Abstract

1. Introduction

2. Related Literature

3. Empirical models and Sample Description

4. Empirical Results

5. Concluding Remarks

References

키워드

Marginal Value of Cash Financial Constraint Manager-Shareholder Conflicts Cash Management