Operating lease obligations and corporate cash management

Douglas O. Cook, Robert Kieschnick and Rabih Moussawi

Journal of Corporate Finance, 2021, vol. 69, issue C

Abstract: Our study addresses two issues overlooked in prior research: Does a firm's future operating lease obligations influence its current cash holdings? Does this relationship contribute to the temporal increase in corporate cash holdings? We provide evidence that these future obligations significantly influence a firm's cash holdings and contribute to the temporal increase in U.S. corporate cash holdings. Consequently, our findings are consistent with the options offered by operating leases to young growing firms and the effect of these operating lease obligations on the firm's operating leverage.

Keywords: Operating leases; Cash; Off-balance sheet (search for similar items in EconPapers)
JEL-codes: G32 M41 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:69:y:2021:i:c:s0929119921001292

DOI: 10.1016/j.jcorpfin.2021.102008

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