Can Changes in the Cost of Carry Explain the Dynamics of Corporate Cash Holdings?

• 成果类型: Article
• 署名作者: Azar, Jose A.; Kagy, Jean-Francois; Schmalz, Martin C.
• 署名单位: Charles River Associates; Alphabet Inc.; Google Incorporated; University of Michigan System; University of Michigan
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhw021
• 发表日期: 2016
• 页码: 2194
• 关键词: US FIRMS HOLD; cross-section; transactions demand; money; governance; determinants; liquidity; time; RISK

摘要

Firms until recently were effectively constrained to hold liquid assets in non-interest-bearing accounts. As a result, the cost of capital of firms' liquid-assets portfolios exceeded the return, especially when the risk-free interest rate was high. The spread between cost and return is the cost of carry. Changes in the cost of carry explain the dynamics of corporate cash holdings both in the United States and abroad, and the level of cost of carry explains the level of liquid-asset holdings across countries. We conclude that current US corporate cash holdings are not abnormal in a historical or international comparison.