Does free cash flow problem contribute to excess stock return synchronicity?

研究成果: Article

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We investigate whether Jensen’s free cash flow problem contributes to excess stock return synchronicity. We find that low-growth firms with high free cash flow have greater stock return synchronicity. These firms also engage in earnings management to lower their disclosure quality. To the extent that free cash flow for low-growth firms provides corporate insiders an opportunity to extract private control benefit, our findings lend direct and concrete support to Jin and Myers (J Financ Econ, 79:257–292, 2006) prediction that insiders increase opaqueness to capture cash flow beyond the level expected by outsider investors. We identify Jensen’s free cash flow problem as an important driver for stock return synchronicity.

元の言語English
ページ(範囲)123-140
ページ数18
ジャーナルReview of Quantitative Finance and Accounting
46
発行部数1
DOI
出版物ステータスPublished - 2016 1 1
外部発表Yes

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ASJC Scopus subject areas

  • Accounting
  • Business, Management and Accounting(all)
  • Finance

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