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Determinants of a firm's cash holdings have been a popular topic of research in finance, especially after the rapid surge in cash holdings for U.S. firms since the 1980s. The wide array of research has focused primarily on firm-specific factors to explain the cross-sectional variations but has...
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Debt capacity creates financial flexibility and collateral-based debt capacity is the least sensitive to cash flow … effects of financial flexibility on firms' cash policies. We find strong evidence that increases in debt capacity lead to …
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causal effects of financial flexibility on cash policies of US firms. Building on this natural experiment, we find strong …
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