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dc.contributor.authorJayakody, Shashitha
dc.contributor.authorMorellid, D.
dc.contributor.authorOberoi, J.
dc.date.accessioned2023-09-14T09:58:33Z
dc.date.accessioned2023-09-29T07:49:43Z
dc.date.available2023-09-14T09:58:33Z
dc.date.available2023-09-29T07:49:43Z
dc.date.issued2023
dc.identifier.citationJayakody S, Morelli D and Oberoi J (2023) Political uncertainty, corruption, and corporate cash holdings. Journal of Corporate Finance. 82: 102447.en_US
dc.identifier.urihttp://hdl.handle.net/10454/19586
dc.descriptionYes
dc.description.abstractExposure to political corruption and political uncertainty separately demands opposing risk management responses: to reduce cash to minimize expropriation and to increase cash to hedge policy risk. We study how local political corruption and political uncertainty interact in their impact on corporate cash holdings within the United States. We find robust evidence that firms located in states with higher corruption scores react to increases in local political uncertainty by increasing cash holdings more than those in less corrupt settings. This behavior suggests that firms in more corrupt settings find it expedient to raise cash to facilitate influence of officials in the face of local political risk. We find further support for this conclusion by showing that politically engaged firms respond to our measure of political risk by increasing cash and increasing spending on campaign contributions. Our findings point to a potential channel through which different jurisdictions experience the entrenchment and persistence of corruption.en_US
dc.language.isoenen_US
dc.rights(c) 2023 The Authors. This is an Open Access article distributed under the Creative Commons CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)en_US
dc.subjectCash holdings
dc.subjectLocal corruption
dc.subjectInfluence
dc.subjectPolitical risk
dc.titlePolitical uncertainty, corruption, and corporate cash holdingsen_US
dc.status.refereedYes
dc.date.Accepted23/06/2023
dc.date.application24/06/2023
dc.typeArticle
dc.type.versionPublished version
dc.identifier.doihttps://doi.org/10.1016/j.jcorpfin.2023.102447
dc.rights.licenseCC-BY-NC-NDen_US
dc.date.updated2023-09-14T09:58:38Z
refterms.dateFOA2023-09-29T07:50:08Z
dc.openaccess.statusopenAccess


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