مقاله انگلیسی رایگان در مورد نقش فساد در شکل دهی به ارزش دارایی های نقدی – الزویر 2017

Introduction

The main goal of the creation of cash stock is to generate financial flexibility in the firm (JP Morgan Research 2005). On the one hand, holding cash can reduce the transaction costs of interacting with the external capital market and at same time can be used as a financial buffer available to firms in times of difficulty accessing credit. On the other hand, cash reserves can cause opportunistic behaviour on the part of the management. Although the majority of published research has shown a positive relationship between liquidity and performance, this relationship appears to depend on the particular characteristics of firms or the peculiarities of the institutional context in which they operate (Dittmar et al. 2003; Pinkowitz et al. 2006). In relation to this, our paper aims to highlight the moderating effect of corruption on the relationship between liquidity and performance. Corruption is a phenomenon that increases the uncertainty and the risk of a business because it questions the existence of a safe legal and judicial system. In particular, the use of cash stock, especially in some contexts, can be used in a distorted way for illicit activities, such as bribes, donations and wages given to specific economic agents, often public, to facilitate business operations or personal benefits. This paper attempts to verify empirically how the effect of the cash holdings on performance may be contingent and dependent on the level of corruption in the institutional context. Interacting with the availability of cash, corruption could enhance the benefits rather than amplify the disadvantages of corporate liquidity, thus exacerbating problems of opportunism and inefficiencies in the system

Corruption, cash holdings and firm performance

One of the most recent areas of research concerning the relationship between cash holdings and firm performance focuses on the role of the institutional context in which firms operate. The institutional context moderates this relationship through several features, such as access to capital markets (Faulkender and Wang 2006; Frésard, 2010), the cost of debt capital and the growth of GDP (Garcia-Teruel and Martínez-Solano, 2008) and the development of the financial system (Dittmar and Mahrt-Smith 2007; Kalcheva and Lins 2007). Concerning the moderating role of corruption, as Chen (2011) stated recently, in contexts that financially underdeveloped, with low investor protection and high levels of corruption, the holding of cash reserves causes great inefficiency and decreases the performance of the firm. Chen (2011) believes that management will hold cash to achieve private benefits and pursue their own interests. Moreover, for those firms which play by the rules but operate in countries in which the chances of running into corrupt activities is high, business performance seems to be adversely affected by the corrupt system.1 The availability of cash can be particularly detrimental for corporate performance in contexts marked by weak investor protection and high corruption compared to those in which the quality of institutions is higher (Kalcheva and Lins, 2007; Pinkowitz et al., 2006). This would seem to arise because management could hold large cash reserves to be used in corrupt activities, having high discretionary power and opportunistic sovereignty, instead of maximizing shareholder wealth. In contrast, in contexts with greater control of corruption the holding of cash increases performance, thanks to the alignment of interests between management and investors, without the distorting effects arising from provisions in “black money”.