Journal article
John C. Easterwood, Bradley S. Paye, Yutong Xie
Journal of Corporate Finance, 2021
Journal of Corporate Finance, 2021
Semantic Scholar
DOI
Cite
Cite
APA
Click to copy
Easterwood, J. C., Paye, B. S., & Xie, Y. (2021). Firm Uncertainty and Corporate Policies: The Role of Stock Return Skewness. Journal of Corporate Finance.
Chicago/Turabian
Click to copy
Easterwood, John C., Bradley S. Paye, and Yutong Xie. “Firm Uncertainty and Corporate Policies: The Role of Stock Return Skewness.” Journal of Corporate Finance (2021).
MLA
Click to copy
Easterwood, John C., et al. “Firm Uncertainty and Corporate Policies: The Role of Stock Return Skewness.” Journal of Corporate Finance, 2021.
BibTeX Click to copy
@article{john2021a,
title = {Firm Uncertainty and Corporate Policies: The Role of Stock Return Skewness},
year = {2021},
journal = {Journal of Corporate Finance},
author = {Easterwood, John C. and Paye, Bradley S. and Xie, Yutong}
}
Abstract
Abstract We study the interaction between firm uncertainty and corporate policies, emphasizing the role of skewness in the distribution of performance shocks reflected in stock returns . Conditional on volatility and other characteristics, firms with more negatively skewed performance shocks adopt more conservative policies, including greater cash holdings, a lower likelihood of dividend payments and increases in payout levels, and less financial leverage. These relationships are significant and robust for asymmetry proxies constructed from stock return innovations, in contrast to results for measures based on accounting performance shocks. This disparity highlights the importance of asymmetries in long-run performance shocks for corporate policy choices.
