Cash holdings around the world: Financial crisis, culture and shareholder rights

Paulo Alves

MPRA Paper from University Library of Munich, Germany

Abstract: The goal of this paper is to study how cash holdings were affected by the financial crisis of 2008. Our results suggest that 2008 financial crisis had a negative impact on cash holdings and in the period from 2008 to 2014, contrarily to the 2009 and 2010. We hypothesize that firms in face of the present levels cash holdings do not need to accumulate more cash to eventual shortfalls. Our results show a negative impact of the shareholder rights on cash holdings during the financial crisis of 2008 and from 2008 to 2014. Possibly precautionary motive is losing power as explanatory theory, contrarily to agency hypothesis. We also have showed that cash holdings from collectivistic countries expresses a higher decrease in 2008 and from 2008 to 2014, contrarily to 2009 and 2010. It seems that collectivistic countries are tolerating more the risk because cash holdings reached values never recorded.

Keywords: Financial crisis; Culture; Shareholder rights. (search for similar items in EconPapers)
JEL-codes: G32 G38 (search for similar items in EconPapers)
Date: 2018, Revised 2018
New Economics Papers: this item is included in nep-cfn
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Citations: View citations in EconPapers (1)

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