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Cash Holdings, Dividend Policy, and Stock Return of the Automobile Related Firms at the Tokyo Stock Exchange: Before and After the US Lehman Shock

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  • Chikashi Tsuji

    (Chuo University)

Abstract

This paper explores the linkage among cash holdings, dividend policies, and stock returns of the automobile related firms at the Tokyo Stock Exchange by employing the panel data analyses. In addition, our research focuses on the two periods: before and after the US Lehman shock. The main findings of our study are as follows. First, 1) before the US Lehman shock, only the internal reserves to total asset ratio is negatively related with the one-year future stock return. Differently from this, 2) after the US Lehman shock, not only the internal reserves to total asset ratio, but also the cash holdings to total asset ratio, the payout ratio, and the plowback ratio are statistically significantly related with the one-year future stock returns.

Suggested Citation

  • Chikashi Tsuji, 2014. "Cash Holdings, Dividend Policy, and Stock Return of the Automobile Related Firms at the Tokyo Stock Exchange: Before and After the US Lehman Shock," Journal of Social Science Studies, Macrothink Institute, vol. 1(2), pages 32-46, July.
    • Handle: RePEc:mth:jsss88:v:1:y:2014:i:2:p:32-46
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    References listed on IDEAS

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    1. Lee Pinkowitz & René Stulz & Rohan Williamson, 2006. "Does the Contribution of Corporate Cash Holdings and Dividends to Firm Value Depend on Governance? A Cross‐country Analysis," Journal of Finance, American Finance Association, vol. 61(6), pages 2725-2751, December.
    2. Michael Faulkender & Rong Wang, 2006. "Corporate Financial Policy and the Value of Cash," Journal of Finance, American Finance Association, vol. 61(4), pages 1957-1990, August.
    3. Basil Al‐Najjar & Yacine Belghitar, 2011. "Corporate cash holdings and dividend payments: evidence from simultaneous analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 32(4), pages 231-241, June.
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