The author would like to thank Dave Mauer, Jayant Kale, an anonymous referee, and seminar participants at the University of New Hampshire for helpful comments and suggestions.
FOUNDING FAMILY OWNERSHIP AND CASH HOLDINGS
Article first published online: 16 JUN 2011
© 2011 The Southern Finance Association and the Southwestern Finance Association
Journal of Financial Research
Volume 34, Issue 2, pages 279–294, Summer 2011
How to Cite
Liu, Y. (2011), FOUNDING FAMILY OWNERSHIP AND CASH HOLDINGS. Journal of Financial Research, 34: 279–294. doi: 10.1111/j.1475-6803.2011.01291.x
- Issue published online: 16 JUN 2011
- Article first published online: 16 JUN 2011
I investigate the relation between founding family ownership and firm cash holdings. I find that cash holdings are significantly lower at family firms than nonfamily firms. I also examine the marginal value of cash and report a smaller value of cash for family firms. Combined, the findings are consistent with the spending hypothesis that family firms tend to deploy cash quickly and the market discounts the quality of their spending.