Scale Economies, the Value of Time, and the Demand for Money: Longitudinal Evidence from Firms
COMPUSTAT data on 12,000 firms for the years 1961-92 indicate that large firms hold less cash as a percentage of sales than small ones. Whether comparisons are made within or across industries, the elasticity of cash balances with respect to sales is about 0.8. Firms headquartered in countries with high wages hold more money for a given level of sales, a finding consistent with the idea that time can substitute for money in the provision of transactions services. The estimates are consistent with both scale economies in the holding of money and secular declines in velocity. Copyright 1997 by the University of Chicago.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:ucp:jpolec:v:105:y:1997:i:5:p:1061-79. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)
If references are entirely missing, you can add them using this form.