Work

Corporate cash holding and firm value

Year: 2011

Type: article

Abstract: This study contrasts the effect of cash holding on firm value for a sample of US industrial firms during 2001–2007. The study tests empirically for the existence of an optimal cash level that maximizes firm value. Second, the study analyses whether or not deviations from the optimum cash level reduce firm value. The results show a concave relation between cash holding and firm value, verifying the existence of an optimum level of cash holding. Additionally consistent with the initial analysis, deviations above and below optimal cash holding decreases the firm value.

Source: Applied Economics

DOI: 10.1080/00036846.2011.595696

Authors: Cristina Martínez-Sola, Pedro J. García-Teruel, Pedro Martínez-Solano

Institutions: Universidad de Jaén, Universidad de Murcia

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2131484871

FWCI: 22.62

Cites: 39

Cited by: 237

Related to: 10