This paper investigates how firm-bank relationships affect corporate cash-holding behavior. Using bank loan and financial statement data from emerging firms in Japan, we find that firms with concentrated bank relationships hold lower levels of cash. Additionally, firms with such bank...

We propose the substitution hypothesis of inventory investment that predicts firms use of inventory to provide liquidity for financially constraint suppliers. Using the exhaustive data set of supplier information for Japanese listed firms, we find an increase in inventory financing when a...

This article reveals that listing status affects corporate cash holdings during a financial crisis. We compare the cash-holding behavior between public and private firms during Japan's banking crisis, which is considered an exogenous shock for a firm's financial decision. Because private firms...

This study shows that spin-offs acquire liquidity from their parent firms through the trade credit channel. We compare the trade credit of spin-offs with that of independent start-ups. Our findings reveal that spin-offs increase accounts payable when their parent firms are major suppliers....

High labor compensation increases a firm's risk because of its large size and inflexibility. Utilizing the confidential Establishment Survey data in Japan, we find that labor is positively associated with cash holdings, {ceteris paribus only in the small-size firms subsample, the firms with less...