دانلود رایگان مقاله انگلیسی تعدیل سرعت دارایی های نقدی - الزویر 2018

Abstract:

This study examines the speed of adjustment of cash holdings and extends the recent work that highlights the importance of accounting for heterogeneity of the speed of adjustment of cash holdings. The results indicate that firms with cash deficits, rated firms and firms with financial surpluses have a slower speed of adjustment, while firms with excess cash, non-rated firms and firms that have financial deficit adjust towards the target faster. Overall, the results support the idea that firms have a target level of cash holdings, however, costs of adjustment as well as costs of non-adjustment affect the speed with which firms adjust towards the target.

4. Conclusion

This study extends the recent work that highlights the importance of accounting for heterogeneity of the speed of adjustment of cash holdings (CH-SOA). Given that previous literature on CH-SOA is very limited and offer conflicting results, we use multiple cash holding target proxies and recently developed methodology to test for differences in CH-SOA for various subsamples of firms. While some of the results have been reported elsewhere, these have been done on a piecemeal basis and over different samples and periods.

Based on the results of the study, overall CH-SOA is relatively high at 0.54, implying that on average firms close over half of their deviation from target in one year. This is higher than any documented for leverage SOA. A high SOA is traditionally interpreted as evidence that firms do have a target level of cash holdings and regularly adjust towards it, thereby supporting the trade-off theory of cash holdings. Since the SOA value is less than 1.00, the dynamic rather than the static trade-off model is better supported by our evidence.

Further investigation shows that SOA varies significantly for the firms with different characteristics. Firms with cash deficit have slower CH-SOA compared to firms with excess cash, and firms that have more excess cash adjust towards the target faster. Larger and, particularly, rated firms, have slower CH-SOA. Larger free cash flow (in absolute terms) leads to faster adjustment towards target. Also, the results indicate that CH-SOA of firms with financial deficit is higher than for firms with financial surplus.