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Collusive Public Corruption, Corporate Cash Holdings, and Capital Expenditures: Evidence from the United States

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  • Moon Kyung Cho

Abstract

This study examines how collusive public corruption in the form of misusing corporate cash holdings resulted in increased capital expenditures in the US over the period of 1976-2019. These effects manifest among firms in the introduction, growth, and mature stages of the corporate life cycle. A strong and positive effect on capital expenditures of collusive public corruption in the form of misusing corporate cash is evident for firms located in the Midwest region, whereas the effects for those located in the West region are strong and negative. The results of the analyses reveal an impact of collusive public corruption on accounting treatments of capital expenditures.

Suggested Citation

  • Moon Kyung Cho, 2023. "Collusive Public Corruption, Corporate Cash Holdings, and Capital Expenditures: Evidence from the United States," Accounting and Finance Research, Sciedu Press, vol. 12(4), pages 100-100, November.
    • Handle: RePEc:jfr:afr111:v:12:y:2023:i:4:p:100
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    References listed on IDEAS

    as
    1. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    2. Glaeser, Edward L. & Saks, Raven E., 2006. "Corruption in America," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1053-1072, August.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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