IDEAS home Printed from https://ideas.repec.org/a/bla/acctfi/v56y2016i2p479-508.html
   My bibliography  Save this article

S&P 500 index addition, liquidity management and Tobin's Q

Author

Listed:
  • Petya Platikanova
  • Henk Berkman

Abstract

type="main" xml:id="acfi12105-abs-0001"> This study examines the revision in cash holdings and the market valuation of investment opportunities of 475 firms added to the Standard & Poor's 500 (S&P 500) stock market index from 1980 to 2010. We find that newly indexed firms have evolved to significantly lower cash balances, which we partially explain by the decreasing growth opportunities following index inclusion. Consistent with index inclusion loosening financial constraints, we document a larger decrease in cash for index inclusions in sectors with high financial dependence. We sort S&P 500 inclusions by corporate governance quality but do not find any empirical support that changes in cash and Tobin's Q are related to management entrenchment.

Suggested Citation

  • Petya Platikanova & Henk Berkman, 2016. "S&P 500 index addition, liquidity management and Tobin's Q," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 56(2), pages 479-508, June.
    • Handle: RePEc:bla:acctfi:v:56:y:2016:i:2:p:479-508
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/acfi.2016.56.issue-2
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Houdou Basse Mama & Stefan Mueller & Ulrich Pape, 2017. "What’s in the news? The ambiguity of the information content of index reconstitutions in Germany," Review of Quantitative Finance and Accounting, Springer, vol. 49(4), pages 1087-1119, November.
    2. Siva K. Balasubramanian & Yiwei Fang & Zihao Yang, 2021. "Twitter Presence and Experience Improve Corporate Social Responsibility Outcomes," Journal of Business Ethics, Springer, vol. 173(4), pages 737-757, November.
    3. Hernandez-Perdomo, Elvis & Guney, Yilmaz & Rocco, Claudio M., 2019. "A reliability model for assessing corporate governance using machine learning techniques," Reliability Engineering and System Safety, Elsevier, vol. 185(C), pages 220-231.
    4. Cambrea, Domenico Rocco & Ponomareva, Yuliya & Pittino, Daniel & Minichilli, Alessandro, 2022. "Strings attached: Socioemotional wealth mixed gambles in the cash management choices of family firms," Journal of Family Business Strategy, Elsevier, vol. 13(3).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:acctfi:v:56:y:2016:i:2:p:479-508. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaanzea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.