The Impact of Macroeconomic Uncertainty on Cash Holdings for Non-Financial Firms


Baum, Christopher F. ; Caglayan, Mustafa ; Ozkan, Neslihan ; Talavera, Oleksandr


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URL: http://ub-madoc.bib.uni-mannheim.de/117
URN: urn:nbn:de:bsz:180-madoc-1178
Document Type: Working paper
Year of publication: 2004
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Subject headings (SWD): Makroökonomie
Abstract: This paper investigates the effects of macroeconomic volatility on non-financial firms' cash holding behavior. Using an augmented cash buffer-stock model, we demonstrate that an increase in macroeconomic volatility will cause the cross-sectional distribution of firms' cash-to-asset ratios to narrow. We test this prediction on a panel of non-financial firms drawn from the annual COMPUSTAT database covering the period 1957 - 2000, and find that as macroeconomic uncertainty increases, firms behave more homogeneously. Our results are shown to be robust to the inclusion of the levels of several macroeconomic factors.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Baum, Christopher F. ; Caglayan, Mustafa ; Ozkan, Neslihan ; Talavera, Oleksandr (2004) The Impact of Macroeconomic Uncertainty on Cash Holdings for Non-Financial Firms. Open Access [Working paper]
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