A Cross-country Study of Corporate Financial Structure and the Flexibility Issue / Eine Querschnittsanalyse der Finanzstruktur von Unternehmen und der Flexibilitätsaspekt

Rivaud-Danset Dorothée ()
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Rivaud-Danset Dorothée: Université de Reims, Champagne-Ardennes, UFR des sciences économiques et gestion, 57bis rue Pierre Taittinger, F-51096 Reims, France

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2001, vol. 221, issue 5-6, 689-709

Abstract: Firms need flexibility, defined as the capacity to react to unexpected situations. Corporate flexibility improves with liquidity. For non-financial firms, sources of liquidity are twofold: internal, by keeping cash, and external, through a borrowing power, usually from banks. On the average, a high rate of cash testifies to a lack of mutual trust between bank and firm, typical of a ‘procedure-based’ banking model and a ‘Exit-dominated’ financial system (versus a ‘Voice-dominated’ one). Data Analysis supports the view that cash balance is an indicator of corporate financial pattern which should be taken into account to characterize national financial systems. This article brings a new perspective to the analysis of financial system differences by focusing on corporate liquidity.

Keywords: Flexibility; liquidity; short-term loan; overdraft; cash balance; international comparison; Flexibilität; Liquidität; kurzfristige Kredite; Kontoüberziehung; Kassenbestand; internationaler Vergleich (search for similar items in EconPapers)
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:221:y:2001:i:5-6:p:689-709

DOI: 10.1515/jbnst-2001-5-613

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