Work

Cash holdings and corporate financialization: Evidence from listed Latin American firms

Year: 2022

Type: article

Abstract: The increase in cash holdings held by non-financial corporations in emerging economies in general, and Latin American in particular, has received less attention vis-à-vis their advanced economies’ peers. Considering that cash holdings contain not only cash but also short-term, interest-bearing assets, we test whether the pursuit of financial revenues was one motive behind the decision to hold this type of asset as it is claimed in analyses of corporate financialization. We use a panel of listed non-financial firms from Argentina, Brazil, Chile, Mexico, and Peru between 1998 and 2018 to test this hypothesis. Although we find supporting statistical evidence in favor of this relation, this is mostly explained by Brazil and results point towards a low economic significance.

Source: Competition & Change

DOI: 10.1177/10245294221117275

Authors: Joel Rabinovich, Rodrigo Pérez Artica

Institutions: City, University of London, City St George's, University of London, Instituto de Investigaciones Económicas y Sociales del Sur, Universidad Nacional del Sur

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: hybrid

Estimated APC paid: $3,250