Cash holdings of listed and unlisted firms new evidence from the euro area_accepted.pdf (343.03 kB)
Cash holdings of listed and unlisted firms: new evidence from the euro area
journal contribution
posted on 2019-09-12, 14:30 authored by Panagiotis Asimakopoulos, Stylianos Asimakopoulos, Filipa Da Silva FernandesThis paper examines the cash holdings behavior of listed and unlisted firms. We argue that unlisted firms, which are smaller, face a greater wedge between the cost of external and internal finance and as a result they need to rely more on the later. Relying on internal funds means that firms have a precautionary motive to hold cash. We test our theory using an unbalanced panel of mainly small medium enterprises within the euro area over the period 2003–2017 paying special attention to the role of financial pressure, financial constraints and the recent financial crisis. Our findings reveal that unlisted firms hold more cash than their listed counterparts due to precautionary motives. In addition, when considering the effect of financial pressure, the results show that the difference in cash holdings between listed and unlisted firms exhibit a ‘U-shaped’ relationship. Finally, unlisted firms have a higher sensitivity to save cash out of cash flow than listed firms. Our results are robust to using different specifications and different financial pressure measures.
History
School
- Business and Economics
Department
- Business
Published in
The European Journal of FinanceVolume
25Issue
17Pages
1708 - 1729Publisher
Taylor & Francis (Routledge)Version
- AM (Accepted Manuscript)
Rights holder
© Informa UK Limited, trading as Taylor & Francis GroupPublisher statement
This is an Accepted Manuscript of an article published by Taylor & Francis in The European Journal of Finance on 12 August 2019, available online: http://www.tandfonline.com/10.1080/1351847X.2019.1652197.Acceptance date
2019-07-30Publication date
2019-08-12Copyright date
2019ISSN
1351-847XeISSN
1466-4364Language
- en
Depositor
Dr Panagiotis AsimakopoulosUsage metrics
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