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Acharya, Viral V.; Davydenko, Sergei A.; Strebulaev, Ilya A. - 2012

Intuition suggests that firms with higher cash holdings should be 'safer' and have lower credit spreads. Yet empirically, the correlation between cash and spreads is robustly positive. This puzzling finding can be explained by the precautionary motive for saving cash, which in our model causes...

Persistent link: https://www.econbiz.de/10010206259

Where do institutional investors seek shelter when disaster strikes? : evidence from COVID-19

Glossner, Simon; Matos, Pedro; Ramelli, Stefano; … - 2020

During the COVID-19 market crash, U.S. stocks with higher institutional ownership -- in particular, those held more by active, short-term, and more exposed institutions -- performed worse. Portfolio changes through the first quarter of 2020 reveal that institutional investors prioritized...

Persistent link: https://www.econbiz.de/10012271074

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 effect of foreign cash holdings on internal capital markets and firm financing

De Simone, Lisa; Lester, Rebecca - 2018

borrow domestically, finding this behavior is associated with shareholder payouts and some domestic investment spending …

Persistent link: https://www.econbiz.de/10011980274

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

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

Bannier, Christina E.; Schürg, Carolin - 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

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

Asset volatility and capital structure : evidence from corporate mergers

Levine, Oliver; Wu, Youchang - In: Management science : journal of the Institute for … 67 (2021) 5, pp. 2773-2798

Persistent link: https://www.econbiz.de/10012550014

Multinationals stockpiling cash : exploring a commodity boom

Hansen, Erwin; Wagner, Rodrigo - 2015

them set up as Foreign Direct Investment (FDI). This industry offers a peculiar advantage as a laboratory for social … science when exploring cash-flow sensitivity: given time to build, investment decisions depend on the expectations of the long … considered Foreign Direct Investment in the Balance of Payments, at least in the short run, a significant fraction of it does not …

Persistent link: https://www.econbiz.de/10011316666

Cash Stockpiles and Investment : Do Cash-Rich Firms Use Cash in Acquisitions?

Pinkowitz, Lee - 2012

U.S. firms are hoarding a $2 trillion cash stockpile which many believe will spur acquisition activity. In light of this fact, we examine whether cash-rich firms actually use their cash when making acquisitions. Surprisingly, we show that firms in the top third of cash holdings are 45% more...

Persistent link: https://www.econbiz.de/10013115073