Uncertainty and the value of cash holdings

Hyun Joong Im, Heungju Park and Gege Zhao

Economics Letters, 2017, vol. 155, issue C, 43-48

Abstract: We find that a firm facing higher uncertainty has a higher value of cash. This effect is attributed to the increased value of the option to wait and see as well as the aggravated financial constraints and mitigated agency conflicts.

Keywords: Uncertainty; Cash holdings; Real options; Financial constraints; Agency costs (search for similar items in EconPapers)
JEL-codes: D22 D81 D92 G31 G32 G34 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S016517651730099X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:155:y:2017:i:c:p:43-48

DOI: 10.1016/j.econlet.2017.03.005

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().