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Institutional determinants of cash holdings speed of adjustment

Svetlana V. Orlova and Li Sun

Global Finance Journal, 2018, vol. 37, issue C, 123-137

Abstract: We investigate whether institutional determinants, especially corporate governance and investors' rights protection, affect cash holdings deviation from target and adjustment speed. Using a large, international sample of firms, we find that institutional determinants, including corporate governance, influence the amount of excess cash (deviation from target) and the speed with which firms in different countries adjust their cash holdings. The findings are robust after inclusion of a wide range of firm-level characteristics and economic and financial development variables.

Keywords: Cash holdings; Speed of adjustment; Institutional determinants; Corporate governance (search for similar items in EconPapers)
JEL-codes: G15 G38 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:glofin:v:37:y:2018:i:c:p:123-137