We explore how trade credit complements cash holdings in product market competition. First, similar to cash to cash flow sensitivity (Almeida, Campello, and Weisbach 2004), we report that trade credit is sensitive to internal cash flows and this sensitivity is moderated by firms' financial...

The experience of the 2007-09 financial crisis has prompted much consideration of the link between the structure of compensation in financial firms and excessive risk taking by their employees. A key concern has been that compensation design rewards managers for pursuing risky strategies but...

We examine how banks affect firms' cash holdings by focusing on the soundness of banks in Japan, a bank-centered market, and we find that the deterioration of a banks' soundness leads firms to save more cash from their cash flows. The deterioration of bank soundness decreases bank-dependent firm...

This paper examines the impact of earnings transparency on corporate cash holdings. Motivated by Barth et al. (2013), who show that firms with less earnings transparency tend to have higher cost of equity, this paper shows that the cross-section differences in earnings transparency cause...

This study investigates the effect of family firm on corporate performance and financial policy (capital structure, cash holding, and cash dividends). Using a sample of Brazilian firms, the study uses a treatment effect model to address self-selection and endogeneity problems. The results show...

In this paper we investigate the impact of regional social capital on corporate cash holdings. We also examine the possible channels through which social capital may affect cash holdings. Using US data, this study shows that firms from a high social capital county hold significantly less cash...

We study the effect of systematic uncertainty on firms' precautionary saving motives. As systematic uncertainty changes firms' operational and investment policies, its implications on firm cash holdings remain unclear. Using a GARCH-model based methodology, we construct novel, forward-looking...

The traditional link between the cash conversion cycle and the firm's profitability is that shortening the cash conversion cycle increases firm's profitability. On the other hand shortening the cash conversion cycle could harm the firm's operations and reduce profitability. This could happen...

We investigate the secular increase in the corporate cash holding over the period 1980-2006. We show that along with firm characteristic–related variables, monetary policy and banking structure have a significant bearing on corporate cash holdings, as they determine the opportunity cost of...

Almeida, Campello, and Weisbach (2004) show that cash flow sensitivities are higher for firms that are financially constrained. This paper updates and extends the work of Almeida, Campello, and Weisbach to account for possible misspecification of financial constraints as well as changes in firm...