The Corporate Propensity to Save

被引:346
作者
Riddick, Leigh A. [1 ]
Whited, Toni M. [2 ]
机构
[1] American Univ, Washington, DC 20016 USA
[2] Univ Rochester, Rochester, NY 14627 USA
关键词
FINANCING CONSTRAINTS; FLOW SENSITIVITY; CASH FLOW; INVESTMENT; EQUILIBRIUM; TESTS; DEBT;
D O I
10.1111/j.1540-6261.2009.01478.x
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Why do corporations accumulate liquid assets ? We show theoretically that intertemporal trade-offs between interest income taxation and the cost of external finance determine optimal savings. Intriguingly, we find that, controlling for Tobin's q, saving and cash flow are negatively related because firms lower cash reserves to invest after receiving positive cash-flow shocks, and vice versa. Consistent with theory, we estimate negative propensities to save out of cash flow. We also find that income uncertainty affects saving more than do external finance constraints. Therefore, contrary to previous evidence, saving propensities reflect too many forces to be used to measure external finance constraints.
引用
收藏
页码:1729 / 1766
页数:38
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