Market Competition, Accounting Conservatism and Value of Excess Cash Holding

Abstract

Abstract:

Based on the research of accounting conservatism's effect on the value of excess cash holding, this paper develops market competition's moderating effect on their relationship. The research results show that the increase of accounting conservatism could enhance the value of excess cash holding, but as an effective alternative governance mechanism, market competition degrades this effect of conservatism. This conclusion enriches and expands both the research of excess cash holding value and economic consequences research of accounting conservatism. It affirms the important role of both accounting conservatism and market competition on the enhancement of excess cash holding value. Besides, it has some practical significance on the supervision of company's cash holding and the value of excess cash holding. It also provides some theoretical support on the development of marketization reform and the improvement of accounting information quality.

Key words: market competition, accounting conservatism, value of excess cash holding

Jia Jing, Zhou Xiaosu, Wu Xihao. Market Competition, Accounting Conservatism and Value of Excess Cash Holding[J]. , 2018, 30(7): 260-270.

References

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