We expand on prior evidence that national-level policy uncertainty affects corporate cash policies and hypothesize that political geography has a significant effect on corporate cash holdings as bi-annual shifts in firms' location on the political map give rise to both time- and spatially-varying levels of exposure to policy risk. We use a state-level index of political alignment with the President as a proxy for political geography and empirically confirm that companies headquartered in states closely aligned with the President tend to increase their cash holdings. Moreover, and in line with the notion that policy uncertainty associated with proximity to political power provides a precautionary motive for holding more cash, the cash flow sensitivity of cash is more pronounced among firms that are financially constrained and politically unconnected. Finally, our tests suggest that such corporate cash management policy in the face of exposure to policy risk can have value implications.

Previous literature provides multiple conflicting arguments on why and when multinationality should enhance or impede the value-relevance of firms' real options. We address this issue by examining whether the relationship between stock returns and changes in return volatility varies with multinationality. Our results indicate that multinationality does indeed act as a real option facilitator. Furthermore, we show that, consistent with the notion that there are limits to the operating flexibility associated with multinationality this benefit only accrues fully if the firm is not financially constrained and stabilizes at very high degrees of multinationality.

We investigate the effect of top managers' myopia on firms' market valuation. We devise a measure of expected CEO tenure as a proxy for the length of CEO decision horizon. After accounting for the endogenous nature of CEO horizon, our empirical tests show that shorter CEO horizon is associated with more agency costs, lower firm valuation and higher levels of information risk. The results are consistent with the notion that a short CEO decision horizon is indicative of preference for investments that offer relatively faster paybacks at the expense of long-term value creation.

We examine the relation between CEO delta, firm locality, and firm value for a sample of 7749 firm-year observations. We find that CEO delta is more value-enhancing for rural firms, those associated with exacerbated agency conflicts resulting from decreased observability of managerial investment decisions and higher levels of information asymmetry. Further, the positive relation between CEO delta and firm value is stronger for rural firms with higher levels of information asymmetry or in less religious areas. Our findings imply that managerial ownership is more effective in mitigating agency conflicts in rural areas with higher levels of information asymmetry and lower degrees of local trustworthy constituents. Our results are robust to alternative definitions of urban/rural firms, the inclusion of additional control variables, and various tests controlling the endogeneity between firm location and value. Finally, the results do not appear to be driven by reverse causality.