| Summary: | 碩士 === 國立交通大學 === 財務金融研究所 === 107 === The past literature pointed out that if the company's excess cash increases, it will increase the company's future stock price return (Simutin (2010)). However, when
measuring excess cash items, they are evaluated by firm characteristic variables such as debt ratio and firm size, and then neglecting the input of intangible assetsorganizational capital. However, the input of organizational capital is inconclusive about the performance of the company. Some literature (Lev et al. 2009; Eisfeldt and Papanikolaou 2013) mentioned that the organizational capital can bring better performance to the company. However, some literatures which pointed out that the problem of the SG&A fee's rigidity would hurt shareholders' interests. Therefore, this study uses organizational capital as a starting point to explore its impact on excess cash.
The empirical results show that the investment of organizational capital can reduce the
external financing cost, and also reduce the excess cash.
Our study has also added the CEO power and financial constraints to discuss. The
past literature on the impact of CEO power on the company has not been conclusive.
Some documents indicate that companies with larger CEO power have more resources
and can make decisions more efficiently through the investment of organizational
capital, which helps to increase the value of the company; The agency problem
advocates that the interests of managers and shareholders are different, which will cause
managers to hurt the value of the company in pursuit of their own interests. In terms of
financial constraints, Bolton, Chen and Wang (2013) stated that when financially
restricted companies hold large amounts of preventive cash as a buffer, the impact of
financial shocks on investment is weak, indicating that financial restrictions on the
company's demand for excess cash are likely to increase its operating stability.Therefore, this study explores excess cash and organizational capital through the
inclusion of CEO power and financial constraints.
|
|---|
