Document Type

Article

Publication Date

2-2019

Abstract

This research examines the relation between government economic policy uncertainty and firm cash holdings. We find evidence that policy uncertainty is positively related to firm cash holdings due to firms’ precautionary motives and, to a lesser extent, investment delays. The relation between policy uncertainty and cash holdings is more pronounced for firms dependent on government spending and extends beyond business cyclicality. Further analysis indicates that the effects of policy uncertainty on corporate cash holdings are distinct from those of political, market, or other macroeconomic uncertainty.

Comments

© 2018 Elsevier Inc. All rights reserved. Original published version available at https://doi.org/10.1016/j.jbusres.2018.10.001

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

First Page

71

Last Page

82

Publication Title

Journal of Business Research

DOI

0.1016/j.jbusres.2018.10.001

Included in

Finance Commons

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