This thesis examines how industry differences affect both corporate financial policies and valuation. Chapter 1 studies the impact of a firm‟s product market power, through the channel of business risk, on its dividend policy. Using three measures of market power – the Herfindahl-Hirschman index, the degree of import competition and the Lerner Index, I find that market power positively affects a firm‟s dividend decision, both in terms of the probability of paying a dividend and the amount of the dividend. I also provide evidence that the route through which market power affects the dividend decision is business risk: a firm with greater market power is less risky and hence more likely to pay dividends and pay more dividends. Chapter 2 examines industry differences on the level of corporate cash holdings since the 1970s with a focus on high-tech versus non-high-tech firms. In contrast to the average cash-to-assets ratio of non-high-tech firms, which remained stable at a level close to that of the 1970s, the average cash ratio of high-tech firms more than tripled from 1980 to 2007. I find that this difference can be explained by changing firm characteristics across these two industrial sectors. This is due to high-tech new listings, whose changing characteristics and increasing proportion have caused the population characteristics of the high-tech sector to tilt toward those typical of firms that hold more cash. Chapter 3 investigates the industry impact on the marginal value of corporate cash holdings and how it has evolved over time. I find that on average the difference in the marginal value of cash between high-tech and non-high-tech firms has become larger during the sub-period which covers the 1990s and 2000s, as compared to earlier time periods. Furthermore, I show that this increase can be explained by changing firm characteristics related to the precautionary demand for holding cash. Overall, this thesis shows that industry differences, represented by varying degrees of market power and changing firm characteristics, have significantly affected corporate financial policies, both in terms of dividend policy and optimal cash holdings.

This thesis examines how industry differences affect both corporate financial policies and valuation. Chapter 1 studies the impact of a firm‟s product market power, through the channel of business risk, on its dividend policy. Using three measures of market power – the Herfindahl-Hirschman index, the degree of import competition and the Lerner Index, I find that market power positively affects a firm‟s dividend decision, both in terms of the probability of paying a dividend and the amount of the dividend. I also provide evidence that the route through which market power affects the dividend decision is business risk: a firm with greater market power is less risky and hence more likely to pay dividends and pay more dividends. Chapter 2 examines industry differences on the level of corporate cash holdings since the 1970s with a focus on high-tech versus non-high-tech firms. In contrast to the average cash-to-assets ratio of non-high-tech firms, which remained stable at a level close to that of the 1970s, the average cash ratio of high-tech firms more than tripled from 1980 to 2007. I find that this difference can be explained by changing firm characteristics across these two industrial sectors. This is due to high-tech new listings, whose changing characteristics and increasing proportion have caused the population characteristics of the high-tech sector to tilt toward those typical of firms that hold more cash. Chapter 3 investigates the industry impact on the marginal value of corporate cash holdings and how it has evolved over time. I find that on average the difference in the marginal value of cash between high-tech and non-high-tech firms has become larger during the sub-period which covers the 1990s and 2000s, as compared to earlier time periods. Furthermore, I show that this increase can be explained by changing firm characteristics related to the precautionary demand for holding cash. Overall, this thesis shows that industry differences, represented by varying degrees of market power and changing firm characteristics, have significantly affected corporate financial policies, both in terms of dividend policy and optimal cash holdings.

A literatura de Finanças oferece evidências de que, tanto no Brasil quantos nos E.U.A., as firmas de capital aberto estão retendo cada vez mais caixa ao longo das últimas décadas. Sobre a fonte de caixa retido, há algumas evidências do importante papel da emissão de ações para as firmas estadunidenses, porém não foram localizados trabalhos relacionados sobre o caso brasileiro. Usando uma base de dados em painel com dados contábeis e de mercado de firmas listadas na BMF&BOVESPA de 1995 a 2013 e o modelo proposto por McLean (2011), estimado através do método dos mínimos quadrados, este estudo objetiva obter evidências sobre as fontes de caixa retido pelas firmas no mercado brasileiro através de análise da amostra completa e de grupos de firmas classificadas como irrestritas e restritas financeiramente. Os resultados encontrados sugerem que a emissão de ações, o endividamento e o fluxo de caixa operacional têm correlação positiva e significante com a variação em caixa e que o fluxo de caixa operacional é a principal fonte de caixa retido das firmas brasileiras. Explorou-se o papel dos motivos precaucionários sobre a decisão de retenção e foram encontradas evidências de que o grupo de firmas restritas financeiramente retém mais a partir do fluxo de caixa operacional em tempos de crescimento nestes motivos. Por último, buscou-se verificar o papel de impactos macroeconômicos sobre a decisão de retenção, com os resultados mostrando que choques exógenos afetam de maneira diferente as firmas consideradas irrestritas e restritas financeiramente. / The Finance literature offers evidence that, in Brazil as in the U.S.A., publicly traded firms are saving more and more cash over the past decades. About the source of cash savings, there is some evidence of the important role of shares issuance for US firms, but no work was found related with the Brazilian case. Using a panel database formed by accounting and market data from listed firms in BM&FBOVESPA from 1995 to 2013 and the model proposed by McLean (2011), estimated by the least squares method, this study aims to gather evidence on the sources of cash retained by companies in the Brazilian market through analysis of the full sample and groups of firms classified as financially unconstrained and constrained. The results suggest that the shares issuance, debt and operating cashflow have positive and significant correlation with the change in cash savings and that operating cashflow is the main source of cash for Brazilian firms. The role of precautionary motives for the retention decision was explored and evidence was found that in times of growth in these motives, more is retained from operating cashflow. Finally, we sought to determine the role of macroeconomic impacts on the retention decision, with the results showing that exogenous shocks affect differently the firms considered financially unconstrained and constrained.

A literatura de Finanças oferece evidências de que, tanto no Brasil quantos nos E.U.A., as firmas de capital aberto estão retendo cada vez mais caixa ao longo das últimas décadas. Sobre a fonte de caixa retido, há algumas evidências do importante papel da emissão de ações para as firmas estadunidenses, porém não foram localizados trabalhos relacionados sobre o caso brasileiro. Usando uma base de dados em painel com dados contábeis e de mercado de firmas listadas na BMF&BOVESPA de 1995 a 2013 e o modelo proposto por McLean (2011), estimado através do método dos mínimos quadrados, este estudo objetiva obter evidências sobre as fontes de caixa retido pelas firmas no mercado brasileiro através de análise da amostra completa e de grupos de firmas classificadas como irrestritas e restritas financeiramente. Os resultados encontrados sugerem que a emissão de ações, o endividamento e o fluxo de caixa operacional têm correlação positiva e significante com a variação em caixa e que o fluxo de caixa operacional é a principal fonte de caixa retido das firmas brasileiras. Explorou-se o papel dos motivos precaucionários sobre a decisão de retenção e foram encontradas evidências de que o grupo de firmas restritas financeiramente retém mais a partir do fluxo de caixa operacional em tempos de crescimento nestes motivos. Por último, buscou-se verificar o papel de impactos macroeconômicos sobre a decisão de retenção, com os resultados mostrando que choques exógenos afetam de maneira diferente as firmas consideradas irrestritas e restritas financeiramente. / The Finance literature offers evidence that, in Brazil as in the U.S.A., publicly traded firms are saving more and more cash over the past decades. About the source of cash savings, there is some evidence of the important role of shares issuance for US firms, but no work was found related with the Brazilian case. Using a panel database formed by accounting and market data from listed firms in BM&FBOVESPA from 1995 to 2013 and the model proposed by McLean (2011), estimated by the least squares method, this study aims to gather evidence on the sources of cash retained by companies in the Brazilian market through analysis of the full sample and groups of firms classified as financially unconstrained and constrained. The results suggest that the shares issuance, debt and operating cashflow have positive and significant correlation with the change in cash savings and that operating cashflow is the main source of cash for Brazilian firms. The role of precautionary motives for the retention decision was explored and evidence was found that in times of growth in these motives, more is retained from operating cashflow. Finally, we sought to determine the role of macroeconomic impacts on the retention decision, with the results showing that exogenous shocks affect differently the firms considered financially unconstrained and constrained.

A literatura de Finanças oferece evidências de que, tanto no Brasil quantos nos E.U.A., as firmas de capital aberto estão retendo cada vez mais caixa ao longo das últimas décadas. Sobre a fonte de caixa retido, há algumas evidências do importante papel da emissão de ações para as firmas estadunidenses, porém não foram localizados trabalhos relacionados sobre o caso brasileiro. Usando uma base de dados em painel com dados contábeis e de mercado de firmas listadas na BMF&BOVESPA de 1995 a 2013 e o modelo proposto por McLean (2011), estimado através do método dos mínimos quadrados, este estudo objetiva obter evidências sobre as fontes de caixa retido pelas firmas no mercado brasileiro através de análise da amostra completa e de grupos de firmas classificadas como irrestritas e restritas financeiramente. Os resultados encontrados sugerem que a emissão de ações, o endividamento e o fluxo de caixa operacional têm correlação positiva e significante com a variação em caixa e que o fluxo de caixa operacional é a principal fonte de caixa retido das firmas brasileiras. Explorou-se o papel dos motivos precaucionários sobre a decisão de retenção e foram encontradas evidências de que o grupo de firmas restritas financeiramente retém mais a partir do fluxo de caixa operacional em tempos de crescimento nestes motivos. Por último, buscou-se verificar o papel de impactos macroeconômicos sobre a decisão de retenção, com os resultados mostrando que choques exógenos afetam de maneira diferente as firmas consideradas irrestritas e restritas financeiramente. / The Finance literature offers evidence that, in Brazil as in the U.S.A., publicly traded firms are saving more and more cash over the past decades. About the source of cash savings, there is some evidence of the important role of shares issuance for US firms, but no work was found related with the Brazilian case. Using a panel database formed by accounting and market data from listed firms in BM&FBOVESPA from 1995 to 2013 and the model proposed by McLean (2011), estimated by the least squares method, this study aims to gather evidence on the sources of cash retained by companies in the Brazilian market through analysis of the full sample and groups of firms classified as financially unconstrained and constrained. The results suggest that the shares issuance, debt and operating cashflow have positive and significant correlation with the change in cash savings and that operating cashflow is the main source of cash for Brazilian firms. The role of precautionary motives for the retention decision was explored and evidence was found that in times of growth in these motives, more is retained from operating cashflow. Finally, we sought to determine the role of macroeconomic impacts on the retention decision, with the results showing that exogenous shocks affect differently the firms considered financially unconstrained and constrained.

Made available in DSpace on 2015-03-05T19:15:18Z (GMT). No. of bitstreams: 0 Previous issue date: 15 / Coordenação de Aperfeiçoamento de Pessoal de Nível Superior / O presente estudo investigou se as companhias brasileiras de capital aberto entre 1995 e 2005 coordenam as políticas de caixa e dívida para efeitos de hedging em condições de restrição financeira. E como a assimetria de direitos de controle e propriedade age sobre a substituição entre caixa e dívida entre os estados de restrição financeira e necessidade de hedging. Os resultados indicam a inexistência de um componente de hedging usando simultaneamente as políticas de caixa e dívida. Observou-se que: a propensão a gerar caixa é maior quando menor a diferença entre direitos de controle e propriedade; a sensibilidade positiva da dívida ao fluxo de caixa ocorre somente no estado de alta necessidade de hedging e está fortemente associado à ocorrência de alta concentração de propriedade e de restrição financeira; as companhias com baixa necessidade de hedging e baixa assimetria entre direitos de controle e propriedade apresentam sensibilidade do caixa ao fluxo de caixa independentemente do estado de restrição finan / This study investigated If Brazilian firms between 1995 and 2005 coordinate policies of cash and debt for the purpose of hedging in condition of financial constraint. And as the asymmetry of rights of control and ownership act on substitution effect between cash and debt in condition of financial constraint and hedging need. The results indicate the inexistence of a hedging component using both cash and debt policies. It was noted that: the incentive to save cash is greater when less difference between rights of control and ownership (wedge); the group of companies with low wedge is the group with the highest average concentration of control; that the positive cash flow sensitivity of debt only in the state of high hedging need and is strongly associated with the occurrence of high concentration of ownership and financial constraint; companies with low hedging need and high concentration of ownership present cash flow sensitivity of cash regardless of the state of financial constraint. The results are unawar