Is Marriage a Turning Point? Evidence from Cash Holdings Behaviour

    Research output: Contribution to journalArticlepeer-review

    2 Citations (SciVal)

    Abstract

    Given that marriage transforms people, with wide-ranging and long-lasting impacts, we examine the role of CEOs' marital status on firms' cash holdings behaviour. Using a large sample of US-listed firms, we find that single CEOs stockpile more cash than their married counterparts do. Our finding is robust to controlling for various CEO characteristics, CFO influence, tackling endogeneity concerns and using alternative measures of cash. Moreover, we show that exogenous CEO turnover resulting in appointments of single (married) CEOs increases (decreases) cash holdings. Additional results show that single-CEO firms practise a more conservative payout policy and save more cash from operating and financing cash flows. Consistent with agency theory, single CEOs extract more compensation from the accumulated cash, leading to a lower value of cash holdings. External corporate governance mechanisms mitigate the relationship between single CEOs and cash holdings. Our results show that single-CEO firms are more prone to agency problems.
    Original languageEnglish
    JournalBritish Journal of Management
    DOIs
    Publication statusPublished (VoR) - 9 May 2023

    Keywords

    • Agency theory
    • Cash holdings
    • Marital status
    • Upper-echelon theory
    • Value of cash

    Fingerprint

    Dive into the research topics of 'Is Marriage a Turning Point? Evidence from Cash Holdings Behaviour'. Together they form a unique fingerprint.

    Cite this