Internal Liquidity and Excess Value

• Main Authors: Hsiang-Jung Cheng, 鄭湘蓉
• Other Authors: 廖咸興
• Format: Others
• Language: en_US
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/65374373593817969236

碩士 === 國立臺灣大學 === 財務金融學研究所 === 99 === Abstract This study employs a sample of 33496 year-firm observations from year 1993 through 2008 to explore the effects of internal liquidity on firm’s excess value and whether they are different between diversified (multidivisional) and focused firms. Empirical results reveal that a firm’s internal liquidity level positively relates to its firm excess value, which is consistent with the financial slack argument. This study also finds that internal liquidity of diversified firms is smaller than focused ones, especially more significant for firms with a higher internal liquidity level, which is consistent with coinsurance assertion of Duchin (2010).