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Do Liquid Assets Lure Managers? Evidence From Corporate Misconduct, Rashid Zaman, Nader Atawnah, Muhammad Nadeem, Stephen Bahadar, Irfan H. Shakri
Do Liquid Assets Lure Managers? Evidence From Corporate Misconduct, Rashid Zaman, Nader Atawnah, Muhammad Nadeem, Stephen Bahadar, Irfan H. Shakri
Research outputs 2022 to 2026
We examine the effect of asset redeployability on corporate misconduct and find a significant positive relationship. Utilizing a large sample of public US firms for the period of 2001 to 2015, we find that a one standard deviation (SD) increase in the proportion of redeployable assets leads to a 7.2% increase in corporate fines. We also find that the positive association between asset redeployability and corporate misconduct varies across types of misconduct and industrial heterogeneity. In our channel analysis, we find that managerial risk-taking is a potential mechanism through which asset redeployability is associated with misconduct. Additional tests reveal that …