Firm structure and corporate cash holdings

• Main Authors: SUBRAMANIAM, Venkat, TANG, Tony, YUE, Heng, ZHOU, Xin
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2011
• Subjects: Firm structure; Cash holdings; Internal capital markets; Asset sales; Agency costs; Business and Corporate Communications; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/1584; https://ink.library.smu.edu.sg/context/soa_research/article/2611/viewcontent/1_s20_S0929119910000349_main__1_.pdf
• Institution: Singapore Management University

We analyze whether the organizational structure of firms (i.e., whether a firm is diversified or focused) affects their cash holdings. Using Compustat firm level and segment-level data, we find that diversified firms hold significantly less cash than their focused counterparts. Our results are robus...