Corporate Cash Hoarding: The Role of Just-in-Time Adoption

• 成果类型: Article
• 署名作者: Gao, Xiaodan
• 署名单位: National University of Singapore
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2017.2775
• 发表日期: 2018
• 页码: 4858-4876
• 关键词: CASH HOLDINGS; inventory; just-in-time; Costly external financing; Trade credit

摘要

I explore the role of the just-in-time (JIT) inventory system in the increase in cash holdings by U.S. manufacturing firms. I develop a model to illustrate the mechanism through which JIT affects cash and quantify its impact. In the model, both cash and inventory can serve as working capital. As firms switch from the traditional system to JIT, they shift resources from inventory to cash to facilitate transactions with suppliers. On average, this switchover accounts for a 4.1-percentage-point increase in the cash-to-assets ratio, which is approximately 28% of the change observed in the data.