Using variations in local real estate prices as exogenous shocks to corporate financing capacity, we investigate the causal effects of financial flexibility on cash policies of US firms. Building on this natural experiment, we find strong evidence that increases in financing capacity lead to smaller corporate cash reserves, declines in the marginal value of cash holdings, and lower cash flow sensitivities of cash. We further find that the decrease in cash holdings is more pronounced in firms with greater investment opportunities, financial constraints, better corporate governance, and lower local real estate price volatility.
Keywords: Financial Flexibility; Collateral Value; Cash Policy; Real Estate Prices
JEL classification: G32; G31; R30
자료실
자료실
[2014년 제 4차] Financial Flexibility and Corporate Cash Policy
작성자 : 관리자
조회수 : 972
게시일 :
2014-12-12