Firms cash management, adjustment cost and its impact on firms' speed of adjustment: a cross country analysis

被引:2
作者
Amin, Qazi Awais [1 ]
Williamson, Tom [1 ]
机构
[1] Coventry Univ, Coventry Business Sch, Gosford St, Coventry CV1 5ED, W Midlands, England
关键词
Cash holdings; Speed of adjustment; Trade-off theory; Scandinavian countries; GMM; CORPORATE GOVERNANCE; FINANCIAL CONSTRAINTS; FLOW SENSITIVITY; HOLDINGS; DETERMINANTS; INVESTMENT; PERFORMANCE; POLICY;
D O I
10.1007/s11156-020-00886-w
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
We investigate the firms' specific attributes that determine the difference in speed of adjustment (SOA) towards the cash holdings target in the Scandinavian countries: Denmark, Norway and Sweden. We examine whether Scandinavian firms maintain an optimal level of cash holdings and determine if the active cash holdings management is associated with the firms' higher SOA and lower adjustment costs. Our findings substantiate that a higher level of off-target cost induces professional managers to rebalance their cash level towards the optimal balance of cash holdings. Our results reveal that Scandinavian firms accelerate SOA towards cash targets primarily for the precautionary motive. Moreover, our results show that SOA is heterogeneous across Scandinavian firms based on adjustment cost and deviate cash holdings towards the target mainly with the support of internal financing. Furthermore, our empirical findings show that the SOA of Norwegian firms is significantly higher than the Danish and Swedish firms.
引用
收藏
页码:53 / 89
页数:37
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