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Cash Holdings and Credit Risk
Acharya, Viral V. - 2011
Intuition suggests that firms with higher cash holdings are safer and should have lower credit spreads. Yet empirically, the correlation between cash and spreads is robustly positive and higher for lower credit ratings. This puzzling finding can be explained by the precautionary motive for...
Persistent link: https://www.econbiz.de/10013125920
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Liquidity Transformation in Asset Management : Evidence from the Cash Holdings of Mutual Funds
Chernenko, Sergey - 2016
We study liquidity transformation in mutual funds using a novel data set on their cash holdings. To provide investors with claims that are more liquid than the underlying assets, funds engage in substantial liquidity management. Specifically, they hold substantial amounts of cash, which they use...
Persistent link: https://www.econbiz.de/10012987135
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How Does Government Borrowing Affect Corporate Financing and Investment?
Graham, John R. - 2014
debt is strongly negatively correlated with corporate debt and investment, but strongly positively correlated with … strategy influences firms' capital structures and investment policies …
Persistent link: https://www.econbiz.de/10013045580
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Uncertainty Shocks, Asset Supply and Pricing Over the Business Cycle
Bianchi, Francesco - 2014
. Firms' shareholders choose not only production and investment, but also capital structure and payout policy subject to … as well as reduce shareholder payout. This mechanism parsimoniously accounts for postwar comovement in investment, stock …
Persistent link: https://www.econbiz.de/10013054525
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Levered Returns
Welch, Ivo - 2016
Do financial markets properly reflect leverage? Unlike Gomes and Schmid (2010) who examine this question with a structural approach (using long-term monthly stock characteristics), my paper examines it with a quasi-experimental approach (using short-term a discrete event). After a firm has...
Persistent link: https://www.econbiz.de/10012994892
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Volatility and Growth : Credit Constraints and Productivity-Enhancing Investment
Aghion, Philippe; Banerjee, Abhijit V.; Angeletos, … - 2021
volatility and growth. We first develop a simple growth model where firms engage in two types of investment: a short-term one and …, thus mitigating volatility. But when firms face tight credit constraints, long-term investment turns procyclical, thus …We examine how credit constraints affect the cyclical behavior of productivity-enhancing investment and thereby …
Persistent link: https://www.econbiz.de/10013252334
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Liquidity Mergers
Almeida, Heitor - 2011
We study the interplay between corporate liquidity and asset reallocation opportunities. Our model shows that financially distressed firms are acquired by liquid firms in their industries even when there are no operational synergies associated with the merger. We call these transactions...
Persistent link: https://www.econbiz.de/10013130982
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Corporate Cash Holding in Asia
Horioka, Charles Yuji - 2013
In this paper, we analyze the determinants of corporate saving in the form of changes in the stock of cash for 11 Asian economies using firm-level data from the Oriana Database for the 2002-2011 period. We find some evidence that cash flow has a positive impact on the change in the stock of...
Persistent link: https://www.econbiz.de/10013071914
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Corporate Liquidity Management : A Conceptual Framework and Survey
Almeida, Heitor - 2013
and wish to ensure efficient investment in the future. We present such a model and use it to survey many of the empirical …
Persistent link: https://www.econbiz.de/10013074911
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Why Do U.S. Firms Hold so Much More Cash than They Used to?
Bates, Thomas W. - 2010
The average cash to assets ratio for U.S. industrial firms increases by 129% from 1980 to 2004. Because of this increase in the average cash ratio, American firms at the end of the sample period can pay back their debt obligations with their cash holdings, so that the average firm has no...
Persistent link: https://www.econbiz.de/10012760630