Excess Cash Holdings, Stock Returns, and Investment Organicity: Evidence from UK Investment Announcements
研究了公司超额现金持有如何影响市场对投资公告的反应，发现超额现金持有能提升市场反应，且有机投资（如产品发布和研发）比无机投资更受市场青睐。
This paper examines whether the market reaction to investment announcements is conditional on company excess cash holdings . Cash may convey significant price‐relevant information about the future cash flows and strategic direction of a company. Using a sample of 4,256 corporate investment announcements by firms listed on the London Stock Exchange over the period 2005–2019, we show that market reactions to new company investment announcements are higher for firms with excess cash holdings. Furthermore, we provide evidence on the relationship between excess cash holdings and market valuation of various investment classes. The results reveal that organic investments are valued more highly by the market than inorganic investments, and the positive impact of excess cash holdings is more pronounced for the set of organic investment decisions, particularly product launches and R&D. Lastly, we evaluate how the motive for holding cash affects the market perception of excess cash holdings. The market views excess cash holdings as positive when cash is held as a result of high exposure to risk, high debt capacity, and high bid–ask spread. Market perception of excess cash holdings reverses from negative before to positive after the global financial crisis.