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Corporate cash holdings and industry risk.
- Source :
- Journal of Financial Research; Jun2024, Vol. 47 Issue 2, p435-470, 36p
- Publication Year :
- 2024
-
Abstract
- I conjecture that a firm's sensitivity to industry shocks escalates its need to retain a cash buffer. Consistent with this conjecture, I find that a 1 SD increase in a firm's industry risk exposure increases cash holdings by 10%. In fact, industry risk has a greater effect on corporate cash holdings than does economywide and idiosyncratic risk in my sample. The effect of industry risk exposure on corporate cash holdings is greater for firms in highly competitive industries, as well as for firms with high leverage, a greater fraction of shortâterm debt, and few tangible assets. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 02702592
- Volume :
- 47
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Journal of Financial Research
- Publication Type :
- Academic Journal
- Accession number :
- 177740886
- Full Text :
- https://doi.org/10.1111/jfir.12374