A bright side of financial constraints in cash management

This paper tests whether financial constraints play a disciplinary role in cash dissipation in the presence of agency problems. We hypothesize that when firms have difficulty raising external funds, empire-building managers of cash-rich firms will be less likely to spend cash on negative NPV project...

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Journal Title: Journal of Corporate Finance Vol. 17; no. 5; pp. 1430 - 1444
Author: Mi (Meg) Luo
Format: Article
Published: Dec 2011