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How valuable is financial flexibility when revenue stops? : evidence from the COVID-19 crisis

Fahlenbrach, Rüdiger; Rageth, Kevin; Stulz, René M. - 2020 - Revised May 17, 2020

Firms with greater financial flexibility should be better able to fund a revenue shortfall resulting from the COVID-19 shock and benefit less from policy responses. We find that firms with high financial flexibility within an industry experience a stock price drop lower by 26% or 9.7 percentage...

Persistent link: https://www.econbiz.de/10012216704

Does Earnings Management Relieve the Negative Effects of Mandatory Pension Contributions?

Phan, Hieu V. - 2016

capital, financing, and investment plans. We study whether firms faced with MCs use both non-cash (NEM) and cash generating … external funding and investment. Our findings suggest that MC firms use CEM because it directly generates cash to fund MCs …

Persistent link: https://www.econbiz.de/10013006538

Product market threats and the value of corporate cash holdings

Chi, Jianxin Daniel; Su, Xunhua - In: Financial management 45 (2016) 3, pp. 705-735

Persistent link: https://www.econbiz.de/10011718693

Heterogeneous effect of uncertainty on corporate investment : evidence from listed Korean firms

Kim, Cheonkoo; Park, Jungsoo; Park, Donghyun; Tian, Shu - In: International journal of empirical economics 2 (2023) 4, pp. 1-26

In this study, we analyse the effect of financial uncertainty on corporate investment using firm-level panel data from … the Republic of Korea. We find that financial uncertainty has a significant negative effect on corporate investment, and … constraints and investment irreversibility amplify the negative effect of uncertainty. The inverted U-shaped curve of the …

Persistent link: https://www.econbiz.de/10014491718

Aggregate Risk and the Choice between Cash and Lines of Credit

Acharya, Viral V. - 2012

We model corporate liquidity policy and show that aggregate risk exposure is a key determinant of how firms choose between cash and bank credit lines. Banks create liquidity for firms by pooling their idiosyncratic risks. As a result, firms with high aggregate risk find it costly to get credit...

Persistent link: https://www.econbiz.de/10013102858

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

Refinancing Risk and Cash Holdings

Harford, Jarrad V. T. - 2013

We find that to mitigate refinancing risk caused by shorter maturity debt, firms increase their cash holdings and save more cash from their cash flows. We also document that the maturity of U.S. firms' long-term debt has markedly shortened over the 1980-2008 period and that this shortening...

Persistent link: https://www.econbiz.de/10013093582

Cash Holdings in Private Firms

Bigelli, Marco - 2010

Results from about 17,000 Italian private companies and 152,000 firm-year observations in the 1996-2005 period show that cash holdings in private firms support both the trade-off model and the financing hierarchy theory. In fact, more cash holdings are a feature of riskier companies and firms...

Persistent link: https://www.econbiz.de/10013150965

Transient Institutional Ownership, Costly External Finance, and Corporate Cash Holdings

Im, Hyun Joong - 2020

We investigate how transient institutional ownership influences the level and value of cash holdings. We show that transient institutional ownership has a positive effect on cash holdings, and this linkage is more pronounced when stock and credit market conditions are less favorable. Using a...

Persistent link: https://www.econbiz.de/10012844766

Stock Liquidity and the Complementarity between External Financing and Cash Holdings

Im, Hyun Joong - 2020

holdings by expanding investment opportunities …

Persistent link: https://www.econbiz.de/10012833045