Title: Market share and cash holdings: The role of predatory pressure and expected agency issues in listed firms
Authors: Schoubben, Frederiek
Van Hulle, Cynthia
Issue Date: 2013
Conference: Midwest Finance Association, Annual Meeting location:Chicago, USA date:13-16 March 2013
Abstract: This paper investigates the impact of market share on the level and the value of cash holdings. Using a sample of listed European firms, the authors find that market share reduces (increases) cash holdings when predatory pressure is high (low). This result is consistent with the notion that the (strategic) hedging motive drives cash holdings of high market share firms only when predatory pressure curbs agency problems associated with increasing market share. The conflict between hedging and agency motives concerning market share is also reflected in shareholder wealth. The authors find that cash holdings are most valuable when predatory pressure is high.
Publication status: published
KU Leuven publication type: IMa
Appears in Collections:Research Center Finance, Leuven
Faculty of Economics and Business (FEB) - miscellaneous
Department of Financial Management, Campus Carolus Antwerp

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