This paper provides new evidence on the link between financial constraints and corporate cash policy. Using time-series data for US public and private manufacturing firms, we find negative correlation between cash holdings and cost-of-carry for large firms. We find no evidence of such a relation...

Do changes in the marginal tax rate of corporations affect their investment? Using a unique dataset on balance sheet and income of firms from 1956-2008 and a new measure of exogenous changes in corporations marginal tax rate, this paper shows that the investment response of large firms to a...