Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 10, 2021 erstellt
Beschreibung:
This study proposes the marital status of a CEO as an alternative explanation of the cash holding behavior of the U.S. firms. Given that marital status determines the risk-taking behavior of the firm, we test whether this behavior is reflected in cash holding. Particularly, we test the precautionary and agency motives of cash holding based on the marital status of the CEO. We show that firms led by single CEOs hold a higher cash level than their married counterparts. The results show that agency motives drive a higher level of cash holding by single CEOs. We confirm this agency motive through the dividend’s behavior of such firms and document that single CEOs pay lower dividends than married CEOs. Our study also shows that having single CEOs in the firm leads to a decrease in a dollar of cash value. We suggest that an effective corporate governance mechanism helps in reducing the opportunistic behavior of single CEOs. Our results remain robust to an alternative battery of tests