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The corporate saving glut

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  • Saibene, Giacomo

Abstract

Since the 2000s, the non-financial corporate sector moved from net borrower to net lender in many advanced economies - what has been labelled the corporate saving glut. Using data on U.S. listed firms, I document that the firms behind this widespread pattern are the largest corporations. The glut is the consequence of a constant profit share, relative to total corporate assets, which is larger than the sum of a decreasing investment share and a small and constant dividend share. In addition, I find no explanation able to empirically account for this pervasive phenomenon: neither deleveraging, nor increased uncertainty, nor increased market power are meaningfully correlated with the emergence of the glut at the firm-level.

Suggested Citation

  • Saibene, Giacomo, 2019. "The corporate saving glut," Journal of Macroeconomics, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:jmacro:v:62:y:2019:i:c:s0164070417304950
    DOI: 10.1016/j.jmacro.2018.11.004
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    Cited by:

    1. Lucia Granelli & Martin Habet & Guergana Stanoeva & Gaetano D’Adamo & Robert Gampfer, 2020. "Puzzles in Non-Financial Corporate Sector Savings across the G20," European Economy - Economic Briefs 063, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Cook, Douglas O. & Kieschnick, Robert & Moussawi, Rabih, 2021. "Operating lease obligations and corporate cash management," Journal of Corporate Finance, Elsevier, vol. 69(C).
    3. Kawamoto,Atsushi & Muraki,Kei, 2020. "Tax Competition : Is It a Source of the Corporate Savings Glut?," Policy Research Working Paper Series 9302, The World Bank.

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    More about this item

    Keywords

    Corporate saving glut; Net lending; Firm saving;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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