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Institutional determinants of cash holdings speed of adjustment

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  • Orlova, Svetlana V.
  • Sun, Li

Abstract

We investigate whether institutional determinants, especially corporate governance and investors' rights protection, affect cash holdings deviation from target and adjustment speed. Using a large, international sample of firms, we find that institutional determinants, including corporate governance, influence the amount of excess cash (deviation from target) and the speed with which firms in different countries adjust their cash holdings. The findings are robust after inclusion of a wide range of firm-level characteristics and economic and financial development variables.

Suggested Citation

  • Orlova, Svetlana V. & Sun, Li, 2018. "Institutional determinants of cash holdings speed of adjustment," Global Finance Journal, Elsevier, vol. 37(C), pages 123-137.
    • Handle: RePEc:eee:glofin:v:37:y:2018:i:c:p:123-137
    DOI: 10.1016/j.gfj.2018.05.002
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    More about this item

    Keywords

    Cash holdings; Speed of adjustment; Institutional determinants; Corporate governance;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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