Internationalization and cash holdings before and after the 2008 financial crisis: an empirical investigation of Latin American firms

Mauricio A. Melgarejo Duran and Sheryl-Ann Stephen

Macroeconomics and Finance in Emerging Market Economies, 2025, vol. 18, issue 1, 120-137

Abstract: This study investigates the determinants of corporate cash holdings for a sample of Latin American domestic and multinational corporations (MNCs) before and after the 2008 financial crisis. Our results show that MNCs have higher cash holdings than firms with only local operations. Before the financial crisis, there is no statistical difference in the cash holdings between the two groups. After the financial crisis, MNCs have higher cash holdings than domestic firms. The negative effect of political risk on cash holdings is less pronounced for MNCs. Internationalization appears to mitigate the impact of economic shocks in Latin American firms.

Date: 2025
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DOI: 10.1080/17520843.2021.1997260

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