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 reduces profitability. However, identifying...

This study assesses the extent at which cash holding affects financial performance of quoted insurance firms in Nigeria. Three hypotheses were formulated in line with objective of the study; Ex-post facto research design and time-series data were adopted and the data for the study were obtained...

We empirically examine the effect of exposure to temporary and persistent cash flow shocks on firm investment and its link with cash holdings. Theoretical models demonstrate that an expectation channel drives a wedge between the investment effects of temporary and persistent cash flow shocks,...

Why do U.S. firms hold much more cash now than they did 40 years ago? I construct a partial equilibrium model of firm dynamics where cash provides a buffer against persistent and transitory cash flow shocks in the presence of costly external finance. I find that 57% of the increase in cash...