Effects of Excess Cash Holdings on Firm Value: Study from the Perspective of Corporate Life Cycle

DOI

10.2991/icemss-14.2014.49How to use a DOI?

Keywords

Excess cash holdings level, Firm value, Corporate life cycle

Abstract

Based on the corporate life cycle theory, the effects of corporate excess cash holdings on firm value is conducted in this paper. The results show that a significant inverse U-shaped relation exists between excess cash holdings level and firm value. It indicates that lots of companies face the problem of financing constraints. Moreover, the results also show that the optimal excess cash holdings level is discrepant at different corporate life cycle stages. Therefore, in order to ensure the corporate cash policy is reasonable, the corporate should make the cash policy according to which corporate life cycle stage it is at.

Copyright

© 2014, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Zhijian Zeng
AU  - Xing Zhou
PY  - 2014/08
DA  - 2014/08
TI  - Effects of Excess Cash Holdings on Firm Value: Study from the Perspective of Corporate Life Cycle
BT  - Proceedings of the 2nd International Conference on Education, Management and Social Science
PB  - Atlantis Press
SP  - 172
EP  - 175
SN  - 2352-5398
UR  - https://doi.org/10.2991/icemss-14.2014.49
DO  - 10.2991/icemss-14.2014.49
ID  - Zeng2014/08
ER  -