Arbeitspapier
Uncertainty Determinants of Corporate Liquidity
This paper investigates the link between the optimal level of non-financial firms? liquid assets and uncertainty. We develop a partial equilibrium model of precautionary demand for liquid assets showing that firms alter their liquidity ratio in response to changes in either macroeconomic or idiosyncratic uncertainty. We test this hypothesis using a panel of non-financial US firms drawn from the COMPUSTAT quarterly database covering the period 1993?2002. The results indicate that firms increase their liquidity ratios when macroeconomic uncertainty or idiosyncratic uncertainty increases.
- Language
-
Englisch
- Bibliographic citation
-
Series: DIW Discussion Papers ; No. 633
- Classification
-
Wirtschaft
Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- Subject
-
liquidity
uncertainty
non-financial firms
dynamic panel data
Rentenmarkt
Bid-Ask Spread
Kapitalanlage
Risiko
Börsenumsatz
USA
- Event
-
Geistige Schöpfung
- (who)
-
Baum, Christopher F.
Caglayan, Mustafa
Stephan, Andreas
Talavera, Oleksandr
- Event
-
Veröffentlichung
- (who)
-
Deutsches Institut für Wirtschaftsforschung (DIW)
- (where)
-
Berlin
- (when)
-
2006
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Baum, Christopher F.
- Caglayan, Mustafa
- Stephan, Andreas
- Talavera, Oleksandr
- Deutsches Institut für Wirtschaftsforschung (DIW)
Time of origin
- 2006
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