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Accruals Quality, Financial Constraints and Corporate Cash Holdings
DEROUICHE, Imen; Mansali, Hatem; Jemai, Karima
2018The 2018 International Conference of the African Federation of Operational Research Societies (AFROS 2018)
 

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Keywords :
Accounting quality;; Accruals quality; Cash holdings; Information asymmetry,; Financial constraints
Abstract :
[en] This paper examines the impact of accruals quality on corporate cash holdings of a large sample of 6,501 observations of French firms listed in Euronext Paris over the period 2000-2015. The results show that cash holdings decrease with accruals quality, suggesting that firms tend to increase their cash reserves in the presence of information asymmetry driven, in particular, by low quality of accounting quality. Results also report that this negative effect is more pronounced in financially constrained firms than in financially unconstrained ones. This indicates that low reporting quality drives higher cash holdings when firms are, in addition, financially constrained, which emphasizes the importance of information asymmetry for corporate cash holdings. Overall, our conclusion is consistent with the precautionary motive for cash holdings. We also find support for the notion that corporate transparency is a key factor in explaining a firm’s cash management policy, and in general, corporate policies.
Disciplines :
Accounting & auditing
Author, co-author :
DEROUICHE, Imen ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
Mansali, Hatem;  IRG, Université Paris-Est (France)
Jemai, Karima;  LIFE, Université de Tunis El Manar (Tunisie)
External co-authors :
yes
Language :
English
Title :
Accruals Quality, Financial Constraints and Corporate Cash Holdings
Publication date :
July 2018
Event name :
The 2018 International Conference of the African Federation of Operational Research Societies (AFROS 2018)
Event organizer :
the African Federation of Operational Research Societies (AFROS)
Event place :
TUNIS, Tunisia
Event date :
from 02-07-2018 to 04-07-2018
Audience :
International
Focus Area :
Finance
Available on ORBilu :
since 17 October 2018

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