Corporate sector cash holding – optimal levels, macro context, or external shocks?
The objective of this paper is to validate the existence of an extensively documented secular upward trend in corporate cash holding. To do this, we use the new data for Poland and review original datasets from Bates et al. [2009] for the U.S. We find no trace of a trend for Poland and believe most...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Sciendo
2023-12-01
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| Series: | International Journal of Management and Economics |
| Subjects: | |
| Online Access: | https://doi.org/10.2478/ijme-2023-0018 |
| _version_ | 1827347354573864960 |
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| author | Berent Tomasz Śniechowski Maciej |
| author_facet | Berent Tomasz Śniechowski Maciej |
| author_sort | Berent Tomasz |
| collection | DOAJ |
| description | The objective of this paper is to validate the existence of an extensively documented secular upward trend in corporate cash holding. To do this, we use the new data for Poland and review original datasets from Bates et al. [2009] for the U.S. We find no trace of a trend for Poland and believe most trends for the U.S. come from the cash piling toward the end of the sample period. At best, the U.S. trend applies merely to small firms. We believe cash holding is a period-dependent time-varying variable which also depends on external shocks (e.g., the pandemic or tax regulations). We show that simple addition of macro data (GDP in our case) vastly improves models focused only on optimal cash holding and firm-specific characteristics. We call for a new three-stage approach to study corporate cash, in which micro considerations are complemented by macro data and external liquidity shock analysis. |
| first_indexed | 2024-03-07T23:48:14Z |
| format | Article |
| id | doaj.art-8dc6d814a6ce4fdfbf142d29275d9205 |
| institution | Directory Open Access Journal |
| issn | 2543-5361 |
| language | English |
| last_indexed | 2024-03-07T23:48:14Z |
| publishDate | 2023-12-01 |
| publisher | Sciendo |
| record_format | Article |
| series | International Journal of Management and Economics |
| spelling | doaj.art-8dc6d814a6ce4fdfbf142d29275d92052024-02-19T09:03:46ZengSciendoInternational Journal of Management and Economics2543-53612023-12-0159429731410.2478/ijme-2023-0018Corporate sector cash holding – optimal levels, macro context, or external shocks?Berent Tomasz0Śniechowski Maciej1Collegium of World Economy, SGH Warsaw School of Economics, Warsaw, PolandCollegium of World Economy, SGH Warsaw School of Economics, Warsaw, PolandThe objective of this paper is to validate the existence of an extensively documented secular upward trend in corporate cash holding. To do this, we use the new data for Poland and review original datasets from Bates et al. [2009] for the U.S. We find no trace of a trend for Poland and believe most trends for the U.S. come from the cash piling toward the end of the sample period. At best, the U.S. trend applies merely to small firms. We believe cash holding is a period-dependent time-varying variable which also depends on external shocks (e.g., the pandemic or tax regulations). We show that simple addition of macro data (GDP in our case) vastly improves models focused only on optimal cash holding and firm-specific characteristics. We call for a new three-stage approach to study corporate cash, in which micro considerations are complemented by macro data and external liquidity shock analysis.https://doi.org/10.2478/ijme-2023-0018cashcash holdingscash managementcash ratiocorporate liquiditye41g32h32 |
| spellingShingle | Berent Tomasz Śniechowski Maciej Corporate sector cash holding – optimal levels, macro context, or external shocks? International Journal of Management and Economics cash cash holdings cash management cash ratio corporate liquidity e41 g32 h32 |
| title | Corporate sector cash holding – optimal levels, macro context, or external shocks? |
| title_full | Corporate sector cash holding – optimal levels, macro context, or external shocks? |
| title_fullStr | Corporate sector cash holding – optimal levels, macro context, or external shocks? |
| title_full_unstemmed | Corporate sector cash holding – optimal levels, macro context, or external shocks? |
| title_short | Corporate sector cash holding – optimal levels, macro context, or external shocks? |
| title_sort | corporate sector cash holding optimal levels macro context or external shocks |
| topic | cash cash holdings cash management cash ratio corporate liquidity e41 g32 h32 |
| url | https://doi.org/10.2478/ijme-2023-0018 |
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