Baum, Christopher F.; Caglayan, Mustafa; Ozkan, Neslihan; … - DIW Berlin (Deutsches Institut für Wirtschaftsforschung) - 2004
This paper investigates the effects of macroeconomic volatility on non-financial firms' cash holding behavior. Using an augmented cash buffer-stock model, we demonstrate that an increase in macroeconomic volatility will cause the cross-sectional distribution of firms' cash-to-asset ratios to...