Title: Cash holdings and business group membership
Authors: Locorotondo, Rosy ×
Dewaelheyns, Nico
Van Hulle, Cynthia #
Issue Date: 2014
Series Title: Journal of Business Research vol:67 issue:3 pages:316-323
Abstract: This study examines the cash policies of business group members (i.e., affiliates). Using a panel dataset of private Belgian affiliates and comparable non-affiliated firms, the empirical results show that business group affiliates hold significantly smaller amounts of cash as compared to non-affiliated firms. This finding is consistent with the notion that affiliates can afford to keep lower cash reserves because these firms can access the internal capital market of the group. The analysis also combines affiliate level and group level data to evaluate cash drivers and shows that groups in financial distress reduce cash holdings in affiliates. However, affiliates that are more important for the group's reputation and operations maintain cash levels comparable to affiliates belonging to financially healthy groups.
ISSN: 0148-2963
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center Finance, Leuven
Faculty of Economics and Business (FEB) - miscellaneous
Department of Financial Management, Campus Carolus Antwerp
× corresponding author
# (joint) last author

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