We study the optimal behaviour of a firm whose cash holdings are determined by a diffusion process and which is faced with the threat of liquidation if internal cash balances fall below some threshold. There is a conflict between the desire to pay out cash as dividends to satisfy relatively impatient shareholders and the need to retain cash as a barrier against possible liquidation (and consequ...

a r t i c l e i n f o In this study, the advanced panel threshold regression model was used to test whether a marginal threshold value representing optimal financial decisions exists respective to the holding ratio of free cash flow, the debt ratio, and the dividend payout ratio determined by the U.S. life and property–casualty insurance industry. The results indicated that an optimal financial...

This paper studies the effects of corporate cash holdings on firm pricing strategy. Focusing on the airline industry to identify markets and rivalry, and utilizing the Aviation Investment and Reform Act of the 21 Century (AIR-21) as a quasi-natural experiment to identify exogenous increases in market-level competition, I test the effect of ex-ante relative-to-rival cash holdings on ex-post chan...

We model the interplay between cash and debt policies in the presence of financial constraints. While saving cash allows constrained firms to hedge against future cash flow shortfalls, reducing current debt – “saving borrowing capacity” – is a more effective way of securing investment in high cash flow states. This trade-off implies that constrained firms will allocate cash flows into cash hold...

issuance value, redemption value and net value of issuance and redemption of investment units is called cash flow to mutual funds. this cash flow to mutual funds is used as an investor sentiment index, when there is significant relationship between cash flow to mutual funds and market return. in this paper, relationship between these two items is to be evaluated. monthly and weekly cash flow to...

cash transfer (cts) is an increasingly popular social protection mechanism used by many developing countries to improve the food security and nutritional status of lower socio-economic groups. this paper is a review of the literature regarding the impact of ct programs on the food security of recipient households in the developing countries, including iran. we looked for all original studies, p...

This paper empirically examines whether additional future fixed capital and R&D investment expenditures induce firms to accumulate cash reserves while considering the role of market imperfections. Implementing a dynamic framework on a panel of US, UK and German companies, we find that firms make larger additions to cash holdings when they plan additional future R&D rather than fixed capital inv...

This paper examines how ownership structure and institutional development influence the liquidity management and investment policies of firms, in response to the threat of political extraction in China. First, we document evidence that firms controlled by private entrepreneurs hold less cash reserves than their state-owned counterparts. In addition, cash holdings (investments) is positively (ne...