We explore the forces that drive cash savings in equity issuance using the average cash-savings rate instead of the marginal cash-savings rate that overstates individual issuers’ cash savings. Equity issuers with high investment opportunities save more cash in anticipation of greater cash...

This study investigates the relationship between board co-option and firms' cash holding behavior. It shows that as the fraction of co-opted directors increases, firms tend to hoard more cash due to agency reasons, indicating that co-opted boards are weaker monitors. The results remain robust to...

Purpose - The purpose of the present study is to determine how the cash conversion cycle (CCC) affects the financial performance of manufacturing companies in Bangladesh. Design/methodology/approach - The authors have collected data of 61 Dhaka Stock Exchange (DSE)-listed firms from the 10...

This study examines the motives of corporations in the Gulf Cooperation Council (GCC) countries to hold cash with a focus on institutional characteristics related to the threat of political extraction. Using firm-level financial data and macro-level and institutional data and applying the GMM...

We examine how corporate cash holdings have evolved over time and how they have been valued by shareholders after the unexpected exogenous shocks caused by the COVID-19 pandemic. Consistent with the precautionary motive of cash, we find that firms reserve more cash and the marginal value of cash...

This paper studies the relationship between economic policy uncertainty (EPU) and the marginal value of corporate cash holdings. We find that the markets place a lower value on firms’ cash holdings under the high level of EPU. Our quasi-experiment tests relating to the 9/11 terrorist attacks...

We examine the difference in cash holdings between high-tech and non-high-tech firms from 1974 to 2007. The average cash-to-assets ratio of non-high-tech firms remained stable throughout the period. In contrast, the average cash ratio of high-tech firms more than tripled from 1980 to 2007. This...

This paper aims to investigate how political determinants, namely political instability and the persistence of corruption, impact on corporate cash holding decisions in Africa. We used a sample of 541 listed firms from seven African countries over the period 2014–2019. We used a dynamic panel...

Aim: A global rise in inflation has sparked a renewed interest in the matter of cash holding decisions in firms. Increasing inflation makes for different cash holding practices, but the effect of cash holdings on firm performance remains unclear. This study aims to determine what the effect of...

In this paper, we propose several factors which can explain the negative relationship between financial constraints and investment-cash flow sensitivity. First, we find that substitutability between reserved cash holdings and internal free cash flow can partially explain why financially...