Corporate Money Demand

• 成果类型: Article
• 署名作者: Gao, Xiaodan; Whited, Toni M.; Zhang, Na
• 署名单位: Renmin University of China; University of Michigan System; University of Michigan; Fudan University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa083
• 发表日期: 2021
• 页码: 1834
• 关键词: transactions demand; financial innovation; welfare cost; firms hold; cash; inflation; economies; scale; time

摘要

We document a hump-shaped relation between corporate cash and both real and nominal interest rates in both aggregate and firm-level data. We rationalize this result in a model where firms finance investment with cash and risky debt. The risky rate rises endogenously with the risk-free rate, spurring precautionary cash demand. Simultaneously, foregone interest lowers cash demand. The first mechanism dominates at low interest rates, and the second at high interest rates. The model matches several data moments and reproduces a nonmonotonic cash-interest relation. This nonmonotonicity implies that interest rates are unlikely to be behind the recent rise in corporate cash.