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The cash-holding link within the supply chain

journal contribution
posted on 12.04.2021, 14:13 by Tri Tri Nguyen, Manh Cuong Nguyen, Hung Quang Bui, Nhung VuNhung Vu
Using a customer–supplier matched sample of US-listed firms from 1980 to 2016, we study the corporate cash-holding relationship between suppliers and their major customers. The key findings suggest that the cash-holding levels of suppliers are positively affected by those of their major customers, consistent with the liquidity argument. The effects are more pronounced when the major customers are in more favourable financial conditions and when they are considered more important to their suppliers. Our results are robust to various endogeneity problems and additional tests. Taken together, these results bring forth an important corporate cash-holding link within the supply chain.

History

School

  • Business and Economics

Department

  • Business

Published in

Review of Quantitative Finance and Accounting

Volume

57

Issue

4

Pages

1309-1344

Publisher

Springer

Version

AM (Accepted Manuscript)

Rights holder

© The Authors

Publisher statement

This is a post-peer-review, pre-copyedit version of an article published in Review of Quantitative Finance and Accounting. The final authenticated version is available online at: https://doi.org/10.1007/s11156-021-00979-0.

Acceptance date

20/03/2021

Publication date

2021-04-09

Copyright date

2021

ISSN

0924-865X

eISSN

1573-7179

Language

en

Depositor

Mrs Nhung Vu. Deposit date: 11 April 2021

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Categories

Exports