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Corporate cash shortfalls and external financing: US vs Japan

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  • Chen, Huan
  • Liu, Xin
  • Phan, Quoc
  • Zheng, Steven Xiaofan

Abstract

Consistent with the funding-horizon theory, we find that cash shortfalls are important determinants of external financing in both the US and Japan. Japanese firms seem less likely to raise external financing compared with US firms. However, after we control for cash shortfalls and other factors known to affect external financing decisions, Japanese firms are as likely to issue debt and equity as US firms.

Suggested Citation

  • Chen, Huan & Liu, Xin & Phan, Quoc & Zheng, Steven Xiaofan, 2025. "Corporate cash shortfalls and external financing: US vs Japan," Finance Research Letters, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324015010
    DOI: 10.1016/j.frl.2024.106472
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    References listed on IDEAS

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