Acharya, Viral V; Davydenko, Sergei A.; Strebulaev, Ilya - C.E.P.R. Discussion Papers - 2009
are positively related to credit risk, resulting in a positive correlation between cash and spreads. In contrast, spreads … are negatively related to the ``exogenous'' component of cash holdings that is independent of credit risk factors …, suggesting that precautionary savings are central to understanding the effects of cash on credit risk. …