A Direct Test of the Free Cash Flow Hypothesis: Evidence from Real Estate Transactions

被引：1

作者：

Chu, Yongqiang ^{[1
]}

Liu, Peng ^{[2
]}

机构：

[1] Univ S Carolina, Dept Finance, Moore Sch Business, 1705 Coll St, Columbia, SC 29208 USA

[2] Cornell Univ, Ctr Real Estate & Finance, 465 Statler Hall, Ithaca, NY 14853 USA

来源：

JOURNAL OF REAL ESTATE FINANCE AND ECONOMICS | 2016年 / 52卷 / 04期

关键词：

Free cash flow hypothesis; Real estate transactions; Corporate governance; CORPORATE GOVERNANCE; REPURCHASE PROGRAMS; AGENCY COSTS; ACQUISITIONS; INVESTMENT; ANNOUNCEMENTS; PERFORMANCE; RETURNS;

D O I：

10.1007/s11146-016-9551-6

中图分类号：

F8 [财政、金融];

学科分类号：

0202 ;

摘要：

This paper tests (Jensen The American Economic Review, 76, 323-329 1986) free cash flow hypothesis using data on real estate transactions. We find that firms with either higher free cash flow or higher cash reserve pay more fore real estate, which is consistent with the free cash flow hypothesis. We also find that the agency costs of free cash flow associated with real estate transactions are more severe when firms have lower Tobin's Q. Furthermore, we find that among the commonly used corporate governance measures, only equity compensation is effective in mitigating the agency problem of free cash flow.

引用

页码：543 / 558

页数：16

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