Corporate cash holdings: causes and consequences
The considerable growth in corporate cash holdings around the world has prompted scholarly interest. Consequently, there is now a large academic literature examining cash holdings and their impact on corporate outcomes and firm values. This article reviews and synthesizes the literature to offer ins...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Published: |
Elsevier
2015
|
| Subjects: | |
| Online Access: | https://eprints.nottingham.ac.uk/32117/ |
| _version_ | 1848794338379694080 |
|---|---|
| author | Amess, Kevin Banerji, Sanjay Lampousis, Athanasios |
| author_facet | Amess, Kevin Banerji, Sanjay Lampousis, Athanasios |
| author_sort | Amess, Kevin |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | The considerable growth in corporate cash holdings around the world has prompted scholarly interest. Consequently, there is now a large academic literature examining cash holdings and their impact on corporate outcomes and firm values. This article reviews and synthesizes the literature to offer insight into two primary motives to hold cash: precautionary and agency. We first present a stylized model that explores the trade-off in holding cash between these two motives and then examine empirical studies to determine how existing theories are supported by evidence using data from a variety of countries. In addition, we examine the effectiveness of a variety of corporate governance devices in curtailing cash holdings and also the extent to which these devices offer investors' confidence that cash will not be wasted. Finally, we discuss methodological and measurement issues associated with empirical cash holdings studies. |
| first_indexed | 2025-11-14T19:14:36Z |
| format | Article |
| id | nottingham-32117 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T19:14:36Z |
| publishDate | 2015 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-321172020-05-04T20:05:49Z https://eprints.nottingham.ac.uk/32117/ Corporate cash holdings: causes and consequences Amess, Kevin Banerji, Sanjay Lampousis, Athanasios The considerable growth in corporate cash holdings around the world has prompted scholarly interest. Consequently, there is now a large academic literature examining cash holdings and their impact on corporate outcomes and firm values. This article reviews and synthesizes the literature to offer insight into two primary motives to hold cash: precautionary and agency. We first present a stylized model that explores the trade-off in holding cash between these two motives and then examine empirical studies to determine how existing theories are supported by evidence using data from a variety of countries. In addition, we examine the effectiveness of a variety of corporate governance devices in curtailing cash holdings and also the extent to which these devices offer investors' confidence that cash will not be wasted. Finally, we discuss methodological and measurement issues associated with empirical cash holdings studies. Elsevier 2015-12 Article PeerReviewed Amess, Kevin, Banerji, Sanjay and Lampousis, Athanasios (2015) Corporate cash holdings: causes and consequences. International Review of Financial Analysis, 42 . pp. 421-433. ISSN 1057-5219 Cash holdings; Liquidity; Corporate governance http://www.sciencedirect.com/science/article/pii/S1057521915001544 doi:10.1016/j.irfa.2015.09.007 doi:10.1016/j.irfa.2015.09.007 |
| spellingShingle | Cash holdings; Liquidity; Corporate governance Amess, Kevin Banerji, Sanjay Lampousis, Athanasios Corporate cash holdings: causes and consequences |
| title | Corporate cash holdings: causes and consequences |
| title_full | Corporate cash holdings: causes and consequences |
| title_fullStr | Corporate cash holdings: causes and consequences |
| title_full_unstemmed | Corporate cash holdings: causes and consequences |
| title_short | Corporate cash holdings: causes and consequences |
| title_sort | corporate cash holdings: causes and consequences |
| topic | Cash holdings; Liquidity; Corporate governance |
| url | https://eprints.nottingham.ac.uk/32117/ https://eprints.nottingham.ac.uk/32117/ https://eprints.nottingham.ac.uk/32117/ |