Work

Determinants of corporate cash holdings in times of crisis: insights from Brazilian sugarcane industry private firms

Year: 2017

Type: article

Abstract: The decision-making process regarding cash allocation, especially in times of recession, is somewhat challenging. Thus, the aim of this study is to evaluate the effects of the financial crisis in cash holdings of privately-held firms in the Brazilian sugarcane industry. For this purpose, a unique, hand-collected panel data of 31 firms for the period from 1998 to 2015 was used. The results show that the private firms of the industry maintain higher levels of cash than the average found by studies with Brazilian public companies. Furthermore, between the two dummy variables used, representing the subprime crisis and the most recent economic crisis in Brazil, only the second one was significant. Finally, in order to overcome the adverse conditions of the current Brazilian economic crisis, it was observed an increase in cash holdings, which, in turn, denotes the relevance of precautionary reasons in the understanding of cash management.

Source: The International Food and Agribusiness Management Review

DOI: 10.22434/ifamr2017.0062

Authors: Aviner Augusto Silva Manoel, Marcelo Botelho da Costa Moraes, David Ferreira Lopes Santos, Marcos Fava Neves

Institutions: Universidade de São Paulo, Universidade Estadual Paulista (Unesp)

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,078