arbiter
JournalsAccount

Peer Financial Reports and Corporate Cash Policy

Marcelo Ortiz & Francisco Urzúa I.

The European Accounting Review2025https://doi.org/10.1080/09638180.2025.2488344article
AJG 3ABDC A*
Weight
0.37

Abstract

This study investigates how peer financial reports influence corporate cash policies. To facilitate empirical identification, we focus our analysis on small European firms with limited reporting requirements and assess how the proportion of industry peers with extended reporting mandates influences their cash holdings. We find a positive association between peer reports and cash holdings. We then run several cross-sectional analyses to explore potential mechanisms. First, the effect is stronger in industries with greater investment opportunities, consistent with small firms learning from peers about shared growth prospects and reinforcing the financing role of cash. Second, we find evidence suggesting that peer disclosures help firms assess liquidity risks, thereby reducing precautionary cash holdings. In contrast, we find limited support for mechanisms related to external financing frictions or agency concerns. Overall, our findings highlight the heterogeneous effects of peer disclosures on cash policy, shaped by firms’ financing needs and exposure to cash flow risks.

1 citation

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1080/09638180.2025.2488344

Or copy a formatted citation

@article{marcelo2025,
  title        = {{Peer Financial Reports and Corporate Cash Policy}},
  author       = {Marcelo Ortiz & Francisco Urzúa I.},
  journal      = {The European Accounting Review},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1080/09638180.2025.2488344},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Peer Financial Reports and Corporate Cash Policy

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.