In this cross-country analysis, we find evidence of a positive relation between creditor rights and the level of corporate cash holdings. In addition, we find that the excess cash motivated by creditor rights has a significant negative impact on firm value. These relationships, however, are...

Economic policy uncertainty imposes a non-diversifiable risk on the firm. Our results show that financial flexibility is a formidable tool for firms in confronting economic policy uncertainty. Researchers have long considered financial flexibility a missing link in the literature as actual firm...