S&P 500 index addition, liquidity management and Tobin's Q

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13 Citas (Scopus)

Resumen

This study examines the revision in cash holdings and the market valuation of investment opportunities of 475 firms added to the Standard & Poor's 500 (S&P 500) stock market index from 1980 to 2010. We find that newly indexed firms have evolved to significantly lower cash balances, which we partially explain by the decreasing growth opportunities following index inclusion. Consistent with index inclusion loosening financial constraints, we document a larger decrease in cash for index inclusions in sectors with high financial dependence. We sort S&P 500 inclusions by corporate governance quality but do not find any empirical support that changes in cash and Tobin's Q are related to management entrenchment.

Idioma originalInglés
Páginas (desde-hasta)479-508
Número de páginas30
PublicaciónAccounting and Finance
Volumen56
N.º2
DOI
EstadoPublicada - 1 jun 2016
Publicado de forma externa

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