2024 Corporate precautionary cash holdings

Corporate precautionary cash holdings

Author: xuys

August undefined, 2024

WebNov 1, 2024 · First, we investigate the effect of EPU on corporate cash holdings to show that firms have an alternative way to meet the needs of precautionary saving when EPU increases. Second, we explore the heterogeneous impact of EPU on financial asset holdings for firms that are subject to financial constraints. WebDec 1, 2015 · Overall, the literature on cash holdings suggests two primary motives which induce firms to hold cash, namely a precautionary motive that relates to future financial constraints and an agency motive that relates to imperfections in the dispersed form of ownership of the public firm.

A Literature Review on the Cash Holding Issues

WebThe precautionary motive for corporate cash holdings, however, has not been adequately modeled in the literature. It has been well documented empirically that cash … WebDownloadable! Purpose - This study aims to investigate the influence of economic policy uncertainty (EPU) and geopolitical risk (GPR) on corporate cash holding level and speed of adjustment (SOA) in one of the most important emerging markets in the Middle East and North Africa, Saudi Arabia. It also investigates whether Shariah-compliance as well as … astronaut senator kelly

Does economic policy uncertainty raise corporate …

WebOct 25, 2024 · Based on the sample of Chinese A-share listed companies from 2006 to 2024, this paper studies the impact of regional investment preference on corporate cash holdings. We find that the stronger the investment preference in the region where the company is located, the higher the level of the company’s cash holdings. After a … WebJan 31, 2024 · The precautionary motive refers to the desire to hold sufficient cash for unexpected contingencies. Holding more liquidity acts as a buffer against negative shocks. Therefore, firms tend to accumulate more cash reserves to avoid raising funds when external capital is expensive ( Bates et al ., 2009; Guizani, 2024 ). WebMar 24, 2024 · We find that EPU is positively related to cash holdings. Based on the mediation analysis, our results suggest that capital expenditures represent an important … astronaut skeleton

Cash holdings and R&D smoothing - ScienceDirect

Cash Holding Determinants in the Greek Hotel Industry: SMEs Versus ...

Webstabilize around 2004, firms began to accumulate cash and other liquid assets. 3. The literature has highlighted a few drivers of cash holdings in Japan. In general, cash holdings reflect precautionary motives given funding uncertainty faced by firms, especially during downturns (see Bates et al., 2009; Sher, 2014; and Dao and Maggi, 2024). WebJan 1, 2013 · There are two main reasons why firms find it beneficial to hold cash: precautionary motive and repatriation taxes.2 The first motive is very simple: Firms … astronaut sitting on planet tattooWebMar 1, 2007 · The precautionary motive states that companies with more investment and growth opportunities hold more cash to hedge against very costly adverse shocks in … astronaut skeleton art

"WebFeb 12, 2024 · Financial literature on cash management has pointed two main motives for corporate managers that leads their decision to hold cash. The first and most prevalent motive is the precautionary which dictates that cash holdings are helpful to firms so as to meet unexpected events and reduce the risk of liquidity constraints, especially under … " - Corporate precautionary cash holdings

Corporate precautionary cash holdings

(PDF) DETERMINANTS AND PERFORMANCE OF CASH …

WebFeb 2, 2012 · We investigate the long-term effect of the Asian financial crisis on corporate cash holdings in 8 East Asian countries. The Asian firms build up cash holdings by decreasing investment activities after the crisis. We find that the increase in cash holdings is not explained by changes in firm characteristics but by changes in the firms’ demand ... WebMay 1, 2013 · Highlights The cash holdings of S&P 500 firms decrease after their inclusion in the index. In 2 years, the mean industry-adjusted cash drops by 32%.Why? The firms are less constrained to raise external capital (precautionary motive subsides). Managerial entrenchment increases, which leads to a reduction in cash. Index firms’ have …

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WebMar 30, 2024 · In Japan, corporate savings have risen since 2000 in line with profits. A large share of the additional savings was kept as cash holdings (i.e., cash and short-term investments) rather than used for investment. Building on a rich literature, this paper identifies two additional drivers of corporate cash holdings using financial data of …

WebApr 5, 2024 · This research provides new evidence on financing constraints on corporate fixed investment by emphasizing the role of cash holdings as a precautionary source of funds. Applying GMM estimates to a sample of 106 Jordanian firms, the results suggest that firms follow trade-off theory in financing their investments but are financially constrained. The objective of this paper is to provide an analysis of corporate precautionary ca… Journal of Financial Economics 13 (1984) 187-221. North-Holland CORPORATE … JOURNAL OF ECONOMIC THEORY 5, 308-335 (1972) Consumption Decisions … When marginal utility is convex, agents accumulate savings as a precautionary m… The Journal of Corporate Finance aims to publish high quality, original manuscrip…

WebApr 12, 2024 · The number of assets held by a company in the form of cash and cash equivalents is known as corporate cash holding (e.g., short-term bonds and money … WebJun 1, 2011 · Almost all corporate finance textbooks have chapters on cash management, including a discussion of precautionary cash holdings. Explanations of the precautionary motive generally center on the fact that cash inflow and outflow are unpredictable and that the less predictable are cash flows, the greater the need for precautionary cash …

WebApr 5, 2024 · To examine the role that corporate cash holdings play in the level of fixed investment, the research ... Corporate precautionary cash . holdings. Journal of Corporate Finance, 13 (1), 43–57.

WebXin and Xu [20] also used the chinese listed company as the empirical research object. They found that asset turnover, corporate growth, cash flows, and financing needs all have positive impacts on corporate cash holdings. 3.2. Corporate Governance. Corporate governance is also a hot influencing issue in the academic community on the cash holding. astronaut sittingWebAug 11, 2014 · As systematic uncertainty changes firms' operational and investment policies, its implications on firm cash holdings remain unclear. Using a GARCH-model … astronaut sitting on moon aloneWebW Cai ， F Hu ， F Xu ， L Zheng. 摘要：. This paper investigates the impact of anti-corruption efforts on firms' cash holdings using detailed hand-collected data on the downfall of corrupt politicians in China from 2010 to 2015. We find that firms increase cash holdings after their local political leaders are investigated for political ... astronaut skeleton vintageWebtransaction cost and precautionary demand theories for corporate cash holdings can explain almost all of the growth in cash-to-asset ratios between 1999 and 2011 in terms … astronaut skeleton shirtWebWhat motives for holding money transactions, precautionary, or asset-explain the following holdings? a. Money to meet Suncor's weekly payroll deposited in the local bank. b. You personally carry $50 even when you have no plans to spend, c. astronaut skeleton tattoo meaningWebJan 1, 2012 · Corporate Precautionary Cash Holdings. Article. Mar 2007; J CORP FINANC; Seungjin Han; Jiaping Qiu; This paper models the precautionary motive for a firm's cash holdings. A two-period investment ... astronaut skeleton wallpaperWeb2 days ago · Using staggered board reforms as a quasi-natural experiment and a difference-in-differences approach, this study examines the impact of corporate governance on cash holdings in 41 countries. astronaut sitting on saturn