دانلود رایگان مقاله آیا پول نقدی پادشاه است؟ عملکرد بازار و پول نقدی در طی رکود اقتصادی

abstract

During a recession firms face a dilemma between investing cash to take advantage of emerging opportunities and holding cash to buffer against the crisis. Given this tension, we ask: Is cash king during a recession? Using a sample of publicly traded manufacturing firms between 2004 and 2010, we use peer cash holdings to instrument for cash and examine whether the curvilinear relationship between cash and stock market performance (Tobin's Q) changes during the economic crisis. We find that the before-recession benefits of cash decline at very high levels of cash holdings (.9 of total assets), whereas the during-recession benefits begin to decline at medium levels of cash holdings (.4 of total assets). Our results reveal that the nature of the curvilinear relationship between cash and market performance shifts from a diminishing returns curve before-recession to a more pronounced inverse U-shaped relationship during-recession.

6. Discussion

Some researchers have pointed to the precautionary benefits of cash (Opler et al., 1999; Mikkelson & Partch, 2003), whereas others have emphasized the adaptive benefits of cash (e.g., Denis & Sibilkov, 2010; Brown & Petersen, 2011). Research that draws attention to the downside of cash holding has found detrimental effects on market performance only at very high level of cash holdings (e.g., N89% of assets; Kim & Bettis, 2014). We found that the benefits and costs of cash holdings are exacerbated during a recession. As presented in Fig. 1, we find a much more pronounced inverse-U shaped relationship between cash and market performance during a recession compared to the diminishing returns curve for before-recession. There are higher benefits to cash holdings at low levels during a recession (from 0 up to 0.4), but the penalty for holding cash starts much earlier (0.4) than in pre-recession period (0.9).