Boileau, Martin; Moyen, Nathalie - Centre Interuniversitaire sur le Risque, les Politiques … - 2009
Cash holdings as a proportion of total assets of U.S. corporations have roughly doubled between 1971 and 2006. Prior research attributes the large cash increase to a rise in firms’ idiosyncratic risk. We investigate two mechanisms by which increased idiosyncratic risk can lead to higher cash...