Talavera, Oleksandr; Ozkan, Neslihan; Caglayan, Mustafa; … - 2004
This paper investigates the effects of macroeconomic volatility on non-financial firms' cash holding behavior. Using an augmented cash buffer-stock model, we demonstrate that an increase in macroeconomic volatility will cause the cross-sectional distribution of firms' cash-to-asset ratios to...