This paper examines how managerial entrenchment, defined as the extent to which managers are able to use their discretion and expropriate wealth from shareholders, influences agency costs. Using a cross-sectional regression framework and a large sample of UK listed firms, we show that there is a...

This paper investigates the relationship between financing constraints and investment-cash flow sensitivities by focusing on cash holdings of firms as the basic classification scheme to separate firms into financially constrained and unconstrained categories. The idea is that high cash reserves...

This paper investigates the characteristics of firms that adopt persistent policies of low leverage and substantial cash reserves. In doing so, specific attention is paid to the role of internal corporate governance mechanisms in influencing firms' conservative financial policies. The analysis...