Northampton Electronic Collection of Theses and Research

Allocation of internally generated corporate cash flow in Africa

Agyei-Boapeah, H. and Machokoto, M. (2018) Allocation of internally generated corporate cash flow in Africa. Journal of Accounting in Emerging Economies. 8(4), pp. 495-513. 2042-1168.

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Allocation of Internally Generated Corporate Cash flow in Africa 2018-Accepted Manuscript (594kB)

Item Type:	Article
Abstract:	We examine how managers of African firms, operating in environments characterised by less developed capital markets and weak institutional structures, make use of their internally generated cash flows. We find that managers of African firms hold most of their internally generated cash flows, and when they decide to spend, they allocate a higher proportion towards dividend payments; followed by leverage adjustments; then to investments; and lastly, to equity repurchases. These allocations are consistent with the existence of a significant financial constraint in African markets, and the use of dividends to signal credit quality in relatively underdeveloped capital markets.
Uncontrolled Keywords:	Financial constraints, cash flow, cash holdings, investments, dividend, Africa
Creators:	Agyei-Boapeah, Henry and Machokoto, Michael
Faculties, Divisions and Institutes:	Faculties > Faculty of Business & Law > Accounting & Finance
Date:	2018
Date Type:	Publication
Page Range:	pp. 495-513
Journal or Publication Title:	Journal of Accounting in Emerging Economies
Volume:	8
Number:	4
Number of Pages:	19
Language:	English
DOI:	https://doi.org/10.1108/JAEE-10-2017-0099
ISSN:	2042-1168
Status:	Published / Disseminated
Refereed:	Yes
URI:	http://nectar.northampton.ac.uk/id/eprint/10550

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