Article (Scientific journals)
Accruals Quality, Financial Constraints And Corporate Cash Holdings
Mansali, Hatem; Derouiche, Imen; Jemai, Karima
2019In Managerial Finance
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Keywords :
Accruals quality; Cash holdings; Financial constraint
Abstract :
[en] This paper examines the impact of accruals quality on the 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 accounting quality. The results also show 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, the conclusion is consistent with the precautionary motive for cash holdings. Support is also found 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 :
Mansali, Hatem;  IRG, Université Paris-Est, France
Derouiche, Imen ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
Jemai, Karima;  IFGT, Université de Tunis El Manar, Tunisia
External co-authors :
yes
Language :
English
Title :
Accruals Quality, Financial Constraints And Corporate Cash Holdings
Publication date :
2019
Journal title :
Managerial Finance
ISSN :
1758-7743
Publisher :
Emerald Group Publishing, United Kingdom
Peer reviewed :
Peer Reviewed verified by ORBi
Available on ORBilu :
since 31 July 2019

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