Why do corporate cash holdings differ within reunified Germany?
Alexander Kupfer (),
Julia Oberndorfer and
Additional contact information
Alexander Kupfer: University of Innsbruck
Julia Oberndorfer: University of Innsbruck
Felix Kunz: University of Innsbruck
Journal of Business Economics, 2022, vol. 92, issue 2, No 3, 197-232
Abstract This study examines German firms’ managerial decision-making from the perspective of corporate cash holdings. An econometric analysis of 89,018 firm-year observations for 2004–2016 shows that East German firms hold significantly more cash than their West German counterparts. It is further demonstrated that no reasonable hypotheses (i.e. structural differences, access to financing, and historical differences) can explain East German firms’ higher cash holdings. Instead, the difference in cash holdings is only relevant for small- and medium-sized enterprises (SMEs). Additionally, East German SMEs adjust excess cash more slowly than West German SMEs. These findings are consistent with the hypothesis that cultural attributes influence managerial decision-making and imply that the norms and values of the former German Democratic Republic persist.
Keywords: Managerial decision-making; Corporate cash holdings; Speed of adjustment; SME; Cultural attributes; Germany (search for similar items in EconPapers)
JEL-codes: G30 G32 M14 Z1 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s11573-021-01055-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:jbecon:v:92:y:2022:i:2:d:10.1007_s11573-021-01055-8
Ordering information: This journal article can be ordered from
Access Statistics for this article
Journal of Business Economics is currently edited by Günter Fandel
More articles in Journal of Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().