Corporate cash shortfalls and external financing: US vs Japan

Huan Chen, Xin Liu, Quoc Phan and Steven Xiaofan Zheng

Finance Research Letters, 2025, vol. 71, issue C

Abstract: Consistent with the funding-horizon theory, we find that cash shortfalls are important determinants of external financing in both the US and Japan. Japanese firms seem less likely to raise external financing compared with US firms. However, after we control for cash shortfalls and other factors known to affect external financing decisions, Japanese firms are as likely to issue debt and equity as US firms.

Keywords: Cash shortfalls; External financing; Debt issue; Equity issue; Japan (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324015010

DOI: 10.1016/j.frl.2024.106472

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