Cash holdings of listed and unlisted firms: new evidence from the euro area

Panagiotis Asimakopoulos; Stylianos Asimakopoulos; Filipa Da Silva  Fernandes

doi:10.1080/1351847X.2019.1652197

Cash holdings of listed and unlisted firms: new evidence from the euro area

Panagiotis Asimakopoulos (Corresponding Author), Stylianos Asimakopoulos, Filipa Da Silva Fernandes

Accountancy & Finance, Finance

Research output: Contribution to journal › Article › peer-review

9 Citations (Scopus)

5 Downloads (Pure)

Abstract

This paper examines the cash holdings behavior of listed and unlisted firms. We
argue that unlisted firms, which are smaller, face a greater wedge between the cost of external and internal finance and as a result they need to rely more on the later. Relying on internal funds means that firms have a precautionary motive to hold cash. We test our theory using an unbalanced panel of mainly small medium enterprises within the euro area over the period 2003-2017 paying special attention to the role of financial pressure, financial constraints and the recent financial crisis. Our findings reveal that unlisted firms hold more cash than their listed counterparts due to precautionary motives. In addition, when considering the effect of financial pressure, the results show that the difference in cash holdings between listed and unlisted firms exhibit a "U-shaped" relationship. Finally, unlisted firms have a higher sensitivity to save cash out of cash flow than listed firms. Our results are robust to using different specifications and different financial pressure measures.

Original language	English
Pages (from-to)	1708-1729
Number of pages	21
Journal	European Journal of Finance
Volume	25
Issue number	17
Early online date	12 Aug 2019
DOIs	https://doi.org/10.1080/1351847X.2019.1652197
Publication status	Published - Aug 2019

Keywords

cash holdings
listed and unlisted firms
precautionary motives
financial pressure
PANEL
DETERMINANTS
FLOW SENSITIVITY
CORPORATE GOVERNANCE
PRESSURE
DEMAND
FINANCIAL CONSTRAINTS
Cash holdings
AGENCY COSTS
EQUITY

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1080/1351847X.2019.1652197Licence: Unspecified

Accepted Manuscript
This is an Accepted Manuscript of an article published by Taylor & Francis in European Journal of Finance on 12 Aug 2019, available online: http://www.tandfonline.com/10.1080/1351847X.2019.1652197
Accepted author manuscript, 343 KBLicence: Other

Cite this

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title = "Cash holdings of listed and unlisted firms: new evidence from the euro area ",

abstract = "This paper examines the cash holdings behavior of listed and unlisted firms. Weargue that unlisted firms, which are smaller, face a greater wedge between the cost of external and internal finance and as a result they need to rely more on the later. Relying on internal funds means that firms have a precautionary motive to hold cash. We test our theory using an unbalanced panel of mainly small medium enterprises within the euro area over the period 2003-2017 paying special attention to the role of financial pressure, financial constraints and the recent financial crisis. Our findings reveal that unlisted firms hold more cash than their listed counterparts due to precautionary motives. In addition, when considering the effect of financial pressure, the results show that the difference in cash holdings between listed and unlisted firms exhibit a {"}U-shaped{"} relationship. Finally, unlisted firms have a higher sensitivity to save cash out of cash flow than listed firms. Our results are robust to using different specifications and different financial pressure measures.",

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author = "Panagiotis Asimakopoulos and Stylianos Asimakopoulos and Fernandes, {Filipa Da Silva}",

year = "2019",

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PY - 2019/8

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KW - CORPORATE GOVERNANCE

KW - PRESSURE

KW - DEMAND

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Cash holdings of listed and unlisted firms: new evidence from the euro area

Abstract

Keywords

UN SDGs

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Filipa Alexandra da Silva Fernandes

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Cash holdings of listed and unlisted firms: new evidence from the euro area

Abstract

Keywords

UN SDGs

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Other files and links

Fingerprint

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Filipa Alexandra da Silva Fernandes

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