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A Note on Stakeholder Theory and Risk: Implications for Corporate Cash Holdings and Dividend Policy


  • Gerhard Speckbacher, Paul Wentges

    () (University of Ulm, Germany)


According to Zingales (1999), corporate governance is defined as the complex set of constraints that shape the ex-post bargaining over the quasi-rents generated by a fim. This paper argues that corporate cash holdings and dividend policy can be used as soft constraints in this regard in order to mitigate the holdup situation of corporate stakeholders and to enhance incentives for firm-specific investments in the face of high total firm risk. Hence stakehloder theory contributes to answering the question why firms choose conservative financial policies.

Suggested Citation

  • Gerhard Speckbacher, Paul Wentges, 2009. "A Note on Stakeholder Theory and Risk: Implications for Corporate Cash Holdings and Dividend Policy," Frontiers in Finance and Economics, SKEMA Business School, vol. 6(1), pages 51-72, April.
  • Handle: RePEc:ffe:journl:v:6:y:2009:i:1:p:51-72

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    Corporate cash holding; dividend policy ; holdup; risk; stakeholder theory;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General


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