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Corporate investment, debt and liquidity choices in the light of financial constraints and hedging needs

Bannier, Christina E.; Schürg, Carolin Victoria - 2015

We examine firms' simultaneous choice of investment, debt financing and liquidity in a large sample of US corporates … future shortfalls in operating income. In contrast to earlier work, our joint estimation approach shows that cash flows … affect the corporate decisions of unconstrained firms more strongly than those of constrained firms. Investment-cash flow …

Persistent link: https://www.econbiz.de/10011306337

Cash Holdings and Relationship Lending

Dahiya, Sandeep; Hallak, Issam; Matthys, Thomas - 2022

We examine the effect of relationship lending on a firm's cash-holding levels. Relationship lending allows lenders to generate private information about borrowers which mitigates their financial constraints. We find that cash-holding levels for firms with a relationship lender are significantly...

Persistent link: https://www.econbiz.de/10014239562

Financial Constraints, Real Options and Corporate Cash Holdings

Ramezani, Cyrus A. - 2013

We posit that firms with valuable real options have higher demand for cash and liquid assets and propose a simple procedure for identifying firms with valuable real options. Our procedure assumes that, all else being equal, a firm's real options are more valuable when their underlying volatility...

Persistent link: https://www.econbiz.de/10013087700

Corporate liquidity management : a conceptual framework and survey

Almeida, Heitor; Campello, Murillo; Cunha, Igor; … - 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/10010227725

Rising Intangible Capital, Shrinking Debt Capacity, and the US Corporate Savings Glut

Falato, Antonio - 2020

This paper explores the connection between rising intangible capital and the secular upward trend in US corporate cash holdings. We calibrate a dynamic model with two productive assets, tangible and intangible capital, to highlight the following points: 1) since only tangible capital can be...

Persistent link: https://www.econbiz.de/10012852047

Rising Intangible Capital, Shrinking Debt Capacity, and the US Corporate Savings Glut

Falato, Antonio - 2018

This paper explores the hypothesis that the rise in intangible capital is a fundamental driver of the secular trend in US corporate cash holdings over the last decades. Using a new measure, we show that intangible capital is the most important firm-level determinant of corporate cash holdings....

Persistent link: https://www.econbiz.de/10012938237

Seeking q : The Marginal Efficiency of Liquidity and Its Effect on Investment Financing and Valuation

Copeland, Thomas E. - 2016

financing decisions can be obtained. Specifically, we focus on how firms finance -- and profit from -- investment projects for …

Persistent link: https://www.econbiz.de/10013006863

Transitory versus permanent shocks : explaining corporate savings and investment

Gryglewicz, Sebastian; Mancini, Loriano; Morellec, Erwan; … - 2018

Theory has recently shown that corporate policies should depend on firms' exposure to short- and long-lived cash flow shocks and the correlation between these shocks. We provide granular estimates of these parameters for Compustat firms using a new filter that uses only cash flow data and the...

Persistent link: https://www.econbiz.de/10011877652

Employment, Corporate Investment and Cash Flow Risk

Alnahedh, Saad - 2019

We highlight the role of cash flow uncertainty on corporate employment and investment. We find that a 1% increase in … cash flow uncertainty leads to a 0.62% decrease in tangible investment, a 1.39% decrease in intangible investment, and a 3 … would like corporations to increase their employment and investment, they should focus on policies that decrease corporate …

Persistent link: https://www.econbiz.de/10012862232

Competition, cash holdings, and financing decisions

Morellec, Erwan; Nikolov, Boris; Zucchi, Francesca - 2013

We use a dynamic model of cash management in which firms face competitive pressure to show that competition increases corporate cash holdings as well as the frequency and size of equity issues. In our model, these effects are driven by small, financially constrained firms, in contrast with the...

Persistent link: https://www.econbiz.de/10010258537