This paper investigates how firm-bank relationships affect corporate cash-holding behavior. Using bank loan and financial statement data from emerging firms in Japan, we find that firms with concentrated bank relationships hold lower levels of cash. Additionally, firms with such bank...

The Lehman Brothers event in 2008 created a large uncertainty shock that triggered an economic slowdown lasting a decade. The macroeconomic effects are well documented, but the effect on business decisions much less so. In this paper, we explore corporate data to investigate how economic...

This paper investigates the effect of financial deepening on the relationship between trade credit and cash holdings among Chinese listed firms. We first document an asymmetric effect of trade payables and receivables on cash holdings, in that firms hold an additional $0.71 of cash for every $1...

We investigate how the value of cash holdings changes following the mandatory adoption of International Financial Reporting Standards (IFRS), which is viewed as an exogenous shock to information asymmetry between firms and outside investors. Using firm-level data from 47 countries, we find that...

We investigate the effect of firm reliance on temporary workers on cash holdings. We exploit the quasi-natural experiment created by a temporary worker protection law in South Korea which requires firms to change a worker's status to full-time once the worker has been employed at the firm for...

Why and when do firms optimally deviate from target cash? And why do we observe imperfect adjustment of cash? In this paper, we postulate and provide evidence that policy uncertainty induces financing frictions and adjustment costs which decelerate the speed of adjustment (SOA) of cash toward...

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...

The determinants of firm level cash holdings are well documented, yet relatively less is known about the influence of CEO characteristics on corporate liquidity decisions. We examine changes in cash holdings around CEO turnover events, a period in which discrete changes in managerial preferences...

We find that U.S. corporations increase their cash holdings in response to higher economic policy uncertainty. The increase in cash holdings is not attributed to a reduction in firm investments. This increase is more pronounced for financially constrained firms or those with larger exposure to...

We study how employment protection laws (EPLs) affect corporate cash-holding decision. By exploiting within-country changes in EPLs across 20 OECD countries as a source of variation in labor adjustment costs, we show that following an increase in the stringency of EPLs, firms' cash holdings...