기업의 현금보유전략이 투자와 상품시장에 미치는 효과: 경쟁기업으로부터 증거

This paper empirically investigates how cash holding strategy affects product market and investment decisions using non-financial firms listed in KOSPI from 1981 to 2010. Prior studies suggest that cash-rich firms use cash as a tool to make competitive advantage strategy to cover rival firms, implying that aggressive price policy defeats the rival firms. Based on these evidence facts as motivation to study this paper, we empirically examine and identify the previous results using non-financial firms in Korean equity market. First, we find that there is a significantly positive relationship between cash holdings and market shares. This result implies that cash-rich firms have higher market shares in product market rather than rival firms. Second, we document that cash holdings and firm value are significantly positive relationship and also cash holdings and operating performance have a significantly positive relationship. Third, for policy of industry entry decision, cash holdings of incumbent firm affect the negative impact on industry entry of new firms. This implies that cash holding strategy of incumbent firms defers entry of new firms. Fourth, for decision of investment expansion, cash holdings of competitor affect a significantly positive impact on investment expansion in new entry firms. In contrast, Fresard(2010) finds that there is a negative impact on investment expansion of new entry firms As a result, there is a different characteristical fact in industry competition between two countries.