This study investigates the effect of family firm on corporate performance and financial policy (capital structure, cash holding, and cash dividends). Using a sample of Brazilian firms, the study uses a treatment effect model to address self-selection and endogeneity problems. The results show...

Amid record levels of corporate cash and debt, this study finds that firms acquire cash, then subsequently increase debt instead of reducing debt after the Homeland Investment Act of 2003. Two possible motives for this change are 1) increasing tax benefits of debt and 2) the role of cash as debt...

I empirically show that the time delay firms face in raising outside capital affects cash holdings. I exploit the 2005 Securities Offering Reform (the Reform) as a quasi-natural experiment. For a subset of large public US firms, the Reform relaxed the requirement to undergo the standard review...

We empirically examine how corporate cash holdings relate to debt structure, that is, the fraction of bond financing. We find that the relation between cash holdings and bond financing is U-shaped in the cross-section of firms. That is, firms that do not use bond financing or those that are...

This research study examines the mediating role of cash holdings between the economic policy uncertainty (EPU) and corporate leverage relationship. Using stepwise regression analysis and annual firm-level data of 2,534 U.S. firms listed at NYSE over 1995-2018, we provide novel evidence that cash...

Intuition suggests that firms with higher cash holdings should be 'safer' and have lower credit spreads. Yet empirically, the correlation between cash and spreads is robustly positive. This puzzling finding can be explained by the precautionary motive for saving cash, which in our model causes...

We examine firms' simultaneous choice of investment, debt financing and liquidity in a large sample of US corporates between 1980 and 2014. We partition the sample according to the firms' financial constraints and their needs to hedge against future shortfalls in operating income. In contrast to...

This paper addresses the following unresolved questions: Why do some firms issue equity instead of debt? Why did most firms retain their cash holdings instead of distributing them as dividends in recent times? How do firms change their financing policies during a period of severe financial...

This paper investigates cash holding behaviour of firms from France, Germany, Japan, the UK and the US using data for 4,069 companies over the period 1996-2000. Our focus is particularly on the relation between cash holdings and leverage. We argue that the impact of leverage on cash balances of...