The effects of multinationality on the market value of cash: Evidence from Latin America
研究了拉丁美洲跨国公司与本土企业现金持有价值的差异，发现投资者并未对跨国公司的现金赋予更高估值，表明跨国经营的优势可能被代理成本和信息不对称抵消。
The aim of this paper is to examine whether the value investors place on cash holdings varies between multinationals and domestic firms from Latin America. Utilizing data from the six largest Latin American economies , our analyses with different proxies of multinationality reveal that investors do not attribute a significant valuation premium, nor do they impose a price discount , on the cash held by Latin American multinational corporations (Multilatinas) when compared to the cash of their domestic counterparts. These findings suggest that shareholders do not view Multilatinas' cash holdings as conferring greater advantages relative to those of domestic firms. We interpret this as evidence that the perceived benefits of multinationality, such as increased growth potential, may be counterbalanced by elevated agency costs and greater information asymmetry . Our study advances the literature on cash holdings and international business and discusses implications for stakeholders of multinational corporations that have subsidiaries in countries with potential growth opportunities but in which poor investor protection may lead to agency conflicts and the risk of improper cash diversion. Our research yields important implications for policymakers by highlighting the relevance of requiring the disclosure of disaggregated information about domestic and foreign cash to improve efficiency in stakeholder decision-making.