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The effects of cash holdings on corporate performance during a credit crunch: evidence from the sub-prime mortgage crisis

  • Frederick Adjei


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    We examine the effects of firms’ cash positions in moderating the impact of the subprime mortgage crisis on corporate performance. We find that corporate performance significantly declines following the onset of the crisis. Firms with low cash reserves had the largest declines in performance following the onset of the financial crisis. However, we do not find any differences in performance decline following the onset of the crisis, when we compare financially constrained firms to financially unconstrained firms. Copyright Springer Science+Business Media, LLC 2013

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    Article provided by Springer in its journal Journal of Economics and Finance.

    Volume (Year): 37 (2013)
    Issue (Month): 2 (April)
    Pages: 188-199

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    Handle: RePEc:spr:jecfin:v:37:y:2013:i:2:p:188-199
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