We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Corporate Culture and Investment-Cash Flow Sensitivity.
- Authors
Jiang, Fuxiu; Kim, Kenneth A.; Ma, Yunbiao; Nofsinger, John R.; Shi, Beibei
- Abstract
Can firms overcome credit constraints with a corporate culture of high integrity? We empirically address this question by studying their investment-cash flow sensitivities. We identify firms with a culture of integrity through textual analysis of public documents in a sample of Chinese listed firms and also through corporate culture statements. Our results show that firms with an integrity-focused culture have lower investment-cash flow sensitivity, even after we address endogeneity concerns. However, we also find that for the culture to reduce the investment-cash flow sensitivity, external stakeholders must be able to verify this culture through a low information asymmetry environment. Overall, our findings show that a corporate culture of high integrity can mitigate a firm's external transaction costs.
- Subjects
CORPORATE culture; CASH flow; COMMERCIAL credit; PUBLIC companies; SENSITIVITY analysis; STAKEHOLDERS; INVESTMENTS
- Publication
Journal of Business Ethics, 2019, Vol 154, Issue 2, p425
- ISSN
0167-4544
- Publication type
Article
- DOI
10.1007/s10551-017-3444-3