Peer effects as a determinant of the speculative motive – A component of cash holdings
DOI:
https://doi.org/10.1590/1808-057x20262335.enPalabras clave:
peer effect, speculative model, cash holdingResumen
The objective of this research was to investigate whether peers’ investment decision specifically sectoral capital expenditures
(CAPEX) influence corporate cash holdings, and to assess the extent to which corporate liquidity is explained by external factors
rather than solely by individual company decisions. Although the literature on cash holdings is extensive, the speculative motive
remains under-explored, particularly regarding its measurement via a proxy linked to peer investment behavior. This study
advances the field by proposing and testing a speculative expectation (SPEC) variable, based on the deviation between a firm’s
CAPEX and the sectoral median, as a proxy for the speculative motive. The research expands the literature by incorporating
peer effects as a determinant of cash policy, highlighting peer influence and broadening understanding of corporate competitive
dynamics, a topic rarely integrated into cash-holding models despite its importance in environments characterized by information
asymmetry. The findings suggest that managers and analysts should treat cash holdings as a strategic decision adapted to the
sector; that is, they should consider factors beyond internal ones alone. Cash-holding levels have implications for financial
management, corporate valuation, and policy formulation in contexts of competitive uncertainty. An econometric approach
was employed using sectoral and financial data from U.S. companies across industries from 2010 to 2024. The study measures
the relationship between sectoral CAPEX (measured by the peer median) and corporate cash holdings, while controlling
for institutional and macroeconomic variables. The results reveal a positive, statistically significant coefficient for the SPEC
variable across various contemporaneous and lagged specifications, and are robust to sensitivity tests, thereby corroborating
the hypothesis that increased relative investment by peers leads to higher cash holdings among U.S. companies.
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