More Cash, Less Innovation: The Effect of the American Jobs Creation Act on Patent Value

Autor:	Po-Hsuan Hsu, Dongmei Li, Heitor Almeida, Kevin Tseng
Rok vydání:	2020
Předmět:	Economics and Econometrics Labour economics 050208 finance Free cash flow Corporate governance media_common.quotation_subject 05 social sciences Multinational corporation Accounting Cash 0502 economics and business Value (economics) Business 050207 economics Finance media_common
Zdroj:	Journal of Financial and Quantitative Analysis. 56:1-28
ISSN:	1756-6916 0022-1090
DOI:	10.1017/s0022109019000954
Popis:	Firms can become less innovative following a sudden cash “inflow.” Specifically, multinational firms that were eligible to repatriate (and indeed repatriated) cash to the United States under the American Jobs Creation Act (AJCA) generate less valuable patents than otherwise similar firms. They also explore more. This effect only exists among firms in less competitive industries, firms with lower institutional ownership (IO), and firms with overconfident chief executive officers (CEOs); this effect is mainly driven by the reduction in the value of U.S.-originated patents. Our evidence suggests that, without appropriate governance, a cash windfall may lead managers to engage in riskier innovation strategy, which can destroy value.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::fd162ff6f31f364452b9d31b44db8c67 https://doi.org/10.1017/s0022109019000954 Zobrazit plný text záznamu