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A Cross-country Study of Corporate Financial Structure and the Flexibility Issue / Eine Querschnittsanalyse der Finanzstruktur von Unternehmen und der Flexibilitätsaspekt

Listed author(s):
  • Rivaud-Danset Dorothée

    ()

    (Université de Reims, Champagne-Ardennes, UFR des sciences économiques et gestion, 57bis rue Pierre Taittinger, F-51096 Reims, France)

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    Firms need flexibility, defined as the capacity to react to unexpected situations. Corporate flexibility improves with liquidity. For non-financial firms, sources of liquidity are twofold: internal, by keeping cash, and external, through a borrowing power, usually from banks. On the average, a high rate of cash testifies to a lack of mutual trust between bank and firm, typical of a ‘procedure-based’ banking model and a ‘Exit-dominated’ financial system (versus a ‘Voice-dominated’ one). Data Analysis supports the view that cash balance is an indicator of corporate financial pattern which should be taken into account to characterize national financial systems. This article brings a new perspective to the analysis of financial system differences by focusing on corporate liquidity.

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    File URL: https://www.degruyter.com/view/j/jbnst.2001.221.issue-5-6/jbnst-2001-5-613/jbnst-2001-5-613.xml?format=INT
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    Article provided by De Gruyter in its journal Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik).

    Volume (Year): 221 (2001)
    Issue (Month): 5-6 (October)
    Pages: 689-709

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    Handle: RePEc:jns:jbstat:v:221:y:2001:i:5-6:p:689-709
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    1. Bertero, Elisabetta, 1994. "The Banking System, Financial Markets, and Capital Structure: Some New Evidence from France," Oxford Review of Economic Policy, Oxford University Press, vol. 10(4), pages 68-78, Winter.
    2. Mayer, Colin, 1988. "New issues in corporate finance," European Economic Review, Elsevier, vol. 32(5), pages 1167-1183, June.
    3. Henry, Claude, 1974. "Investment Decisions Under Uncertainty: The "Irreversibility Effect."," American Economic Review, American Economic Association, vol. 64(6), pages 1006-1012, December.
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