The Credit Crunch and Corporate Cash Holdings: Does the Listing Status Matter?
Year: 2016
Type: preprint
Abstract: This paper examines whether the listing status of the firm affects corporate cash holdings. Using the credit crunch event in banking sector as an exogenous shock of a loss of a choice of financing options, we compare cash holding behaviors between public and private firms during the crisis period. Since private firms largely rely on bank lending, the shock makes private firms save cash because of a precautionary motive. We find that private firms tend to increase their cash holdings after the crisis, and this is more pronounced in private firms that have less cash prior to the crisis period; to increase cash, private firms reduce investment and employment.
Source: SSRN Electronic Journal
Authors: Hidenori Takahashi, Kazuo Yamada
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2512294440