Financialization, Shareholder Orientation and the Cash Holdings of US Corporations

Davis, Leila E.

doi:10.1080/09538259.2018.1429147

Cited by 40 publications

(34 citation statements)

References 23 publications

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“…A motive for cash and short-term investments demand highlighted by the financialisation literature is the quest for financial profitability (Davis, 2018). Various historical reasons starting in the 1970s and the 1980s originated this shift from NFCs´ more traditional activities and sources of profits.…”

Section: Cash Holdings and The Financialisation Of The Firm A Generamentioning

confidence: 99%

“…Paradoxically, the quest for financial profits linked to the increased acquisition of financial assets, or what Rabinovich (2019) defines as the financial turn of accumulation hypothesis, has been tested only indirectly (with the exception of Davis, 2018) and somewhat disconnected from the corporate finance literature on cash holdings. We say indirectly because most empirical studies focus on the effect of financial income on physical investment (capital expenditures) rather than financial investments (see, for example, Orhangazi, 2008;Stockhammer, 2004;Tori & Onaran, 2018b, 2018a.…”

Section: Cash Holdings and The Financialisation Of The Firm A Generamentioning

confidence: 99%

“…As we will detail next, a set of variables already used in the literature of cash holdings may capture some of the effects previously described (like leverage). In addition to payout which is already a standard variable, we follow Davis (2018) and include a new variable of financialisation in these models that capture the incentive to accumulate liquid financial assets, namely financial income.…”

Section: B Emerging-markets Specific Motivesmentioning

confidence: 99%

“…The case of 'cash and short-term investments' (a category that includes interest-bearing assets) is especially relevant since it has experienced one of the major increases of all financial assets (Davis, 2016;Rabinovich, 2019). Specifically for the US case, while Rabinovich (2019) rejects what he refers as the financial turn of accumulation hypothesis based on a reassessment of the measurement, composition and evolution of financial income, along with a broader analysis of assets and uses of funds, Davis (2018) finds a positive relation between cash holdings and financial profitability. To the best of our knowledge, the latter is the only econometric analysis on the relation between those variables.…”

Section: Introductionmentioning

confidence: 99%

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Cash Holdings and the Financialisation of Latin American Nonfinancial Corporations

Artica

2020

SSRN Journal

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the growth in cash holdings by non-financial corporations in emerging economies in general and Latin American in particular has received less attention compared to their peers from advanced economies. Taking into account that cash holdings contain not only cash but also short-term, interest-bearing assets, we test whether financial profitability measured by the weight of financial income over total revenues was one motive behind the increase in this type of financial asset as it is claimed in analyses of the financialisation of the firm. We use a panel of nonfinancial firms from Argentina, Brazil, Chile, Colombia, Mexico and Peru to test this hypothesis and find supporting evidence for the Brazilian case only.

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Section: Cash Holdings and The Financialisation Of The Firm A Generamentioning

confidence: 99%

Section: Cash Holdings and The Financialisation Of The Firm A Generamentioning

confidence: 99%

Section: B Emerging-markets Specific Motivesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Cash Holdings and the Financialisation of Latin American Nonfinancial Corporations

Artica

2020

SSRN Journal

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“…The micro‐level studies of financialisation help to understand the different facets through which financialisation can impact firms. Davis () presents evidence of increasing share in financial investments and leveraging for non‐financial corporations in the United States. Tori and Onaran () study non‐financial corporations in the United Kingdom and find the negative impact of both financial payments and financial incomes (rent and interest) on capital accumulation.…”

Section: Theoretical Constructmentioning

confidence: 99%

Impact on Financialisation on Accumulation: Evidence from India

Trivedi

2019

J of App Econs and Policy

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The paper adds to the literature on financialisation with firm‐level evidence from India, an emerging market in the growth phase, when capital accumulation is likely to be important. I use a broader definition of financialisation to add on to the investment function developed by Orhangazi (2008, Cambridge Journal of Economics, 32, 863). Empirically the above specification is tested for two samples of Indian non‐financial firms for the study. The first, Group I, includes firms prominent on the stock market represented by the combined sample of NIFTY non‐financial indices (ninety‐two firms), and the second, Group II, includes a broader group of all non‐financial firms (704 firms). Using the Arellano–Bond dynamic panel model, the paper finds that financialisation has a robust negative impact on capital accumulation. The negative impact of financialisation is reflected in higher financial income for both the samples, underlining a likely trade‐off between income from core activities and real capital accumulation.

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Beyond One‐Size‐Fits‐All: Understanding the Impacts Of Heterogeneous Stakeholders On Firm Performance

Bischoff,

López Manuel,

Vázquez Vicente

2024

Strategic Change

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Drawing on stakeholder and transaction cost theory, we empirically investigate how managerial efforts to engage five different key stakeholder groups affect firm financial performance. Building upon the existing literature on stakeholder heterogeneity, we propose a framework that highlights inter‐stakeholder differences to empirically test whether the commonly used overarching stakeholder groupings are sufficient. This approach allows us to hypothesize about the financial value creation and value destruction potential of integrating each stakeholder individually. Our propositions are tested using a panel dataset consisting of 4926 multinational companies from 2005 to 2020. The results show that the integration of minority shareholders and communities negatively affects financial performance. Conversely, integrating customers and suppliers has a positive impact on financial performance in the long run, while integrating employees has a positive impact in the short run. These findings underscore the particularities of each stakeholder group, pointing to the need to consider heterogeneity in future stakeholder research.

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Financialization, Shareholder Orientation and the Cash Holdings of US Corporations

Cited by 40 publications

References 23 publications

Cash Holdings and the Financialisation of Latin American Nonfinancial Corporations

Cash Holdings and the Financialisation of Latin American Nonfinancial Corporations

Impact on Financialisation on Accumulation: Evidence from India

Beyond One‐Size‐Fits‐All: Understanding the Impacts Of Heterogeneous Stakeholders On Firm Performance

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