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The Impact of Predation Risk on the Marginal Value of Cash Holdings: An Empirical Perspective
Fudan Development Institute, Fudan University, Shanghai, China
Fudan Development Institute, Fudan University, Shanghai, China
- 1 Fudan Development Institute, Fudan University, Shanghai, China
- 2 Fudan Development Institute, Fudan University, Shanghai, China
Journal of Financial Risk Management·Volume 06 (2017)·Pages 150–162·Published 11 May 2017·DOI10.4236/jfrm.2017.62012
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Abstract
As an important external governance mechanism, product market competition has considerable impact on the marginal value of a company’s cash holdings in various aspects. This paper examines the impact of predatory risk on the marginal value of cash holdings in product market by sampling Chinese A-share listed companies from 2000 to 2013. It shows that the predation risk in the product market increases the marginal value of cash holdings by 0.2 Yuan.
KeywordsPredation RiskStock Excess ReturnsMarginal ValueCash Holdings
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