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Contract heterogeneity, operating shortfalls, and corporate cash holdings

Jiang, Hao; Kim, Woochan; Rao, Ramesh K. - 2009

There is anecdotal evidence that the primary reason why managers hold cash on their balance sheets is to cover operating losses (operating shortfalls). In this paper, we rationalize this as an optimal response in a world with contract heterogeneity. Specifically, we relax the standard assumption...

Persistent link: https://www.econbiz.de/10003904170

Cash holdings and financing decisions under ambiguity

Agliardi, Elettra; Agliardi, Rossella; Spanjers, Willy - 2014

This paper addresses the following unresolved questions: Why do some firms issue equity instead of debt? Why did most firms retain their cash holdings instead of distributing them as dividends in recent times? How do firms change their financing policies during a period of severe financial...

Persistent link: https://www.econbiz.de/10011715949

The cash flow sensitivity of cash : replication, extension, and robustness

Almeida, Heitor; Campello, Murillo; Weisbach, Michael S. - 2021

This paper reexamines the empirical evidence on the cash flow sensitivity of cash presented by Almeida, Campello, and Weisbach (2004). The original paper introduces a model in which financially constrained firms choose to save cash out of incremental cash flows but financially unconstrained do...

Persistent link: https://www.econbiz.de/10012582630

Cash, financial flexibility, and product prices : evidence from a natural experiment in the airline industry

Kim, Sehoon - 2017

Corporate cash holdings impact firms' product pricing strategies. Exploiting the Aviation Investment and Reform Act of …

Persistent link: https://www.econbiz.de/10011963285

Product price risk and liquidity management : evidence from the electricity industry

Chen, Lin; Schmid, Thomas; Weisbach, Michael S. - 2018

Product price risk is a potentially important factor for firms' liquidity management. A natural place to evaluate the impact of this risk on liquidity management is the electricity industry, since producing firms face substantial price volatility in wholesale markets. Empirically, higher...

Persistent link: https://www.econbiz.de/10011963380

Learning about profitability and dynamic cash management

Décamps, Jean-Paul; Villeneuve, Stéphane - 2022

Persistent link: https://www.econbiz.de/10012888127

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 … affect the corporate decisions of unconstrained firms more strongly than those of constrained firms. Investment-cash flow … sensitivities are particularly intense for unconstrained firms with high hedging needs. Investment opportunities (as proxied by Q …

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

Business investment, cash holding and uncertainty since the great financial crisis

Smietanka, Pawel; Bloom, Nicholas; Mizen, Paul - 2018

Persistent link: https://www.econbiz.de/10011925867

All you need is cash : corporate cash holdings and investment after the global financial crisis

Joseph, Andreas; Kneer, Christiane; Horen, Neeltje van - 2021

Cash holdings at the onset of a financial crisis are a key determinant of investment by SMEs not only during the crisis … persistent and growing investment gap. The amplification effect was present for SMEs with both volatile and stable cash holdings …

Persistent link: https://www.econbiz.de/10012509557

The effects of credit lines on cash holdings and capital investment : evidence from Japan

Honda, Tomohito - 2022

Persistent link: https://www.econbiz.de/10013550302