This paper examines the role of labor leverage in determining cash held by companies on their balance sheets. Labor leverage is defined as an off-balance sheet intangible liability that is created by the fixed obligation for firms to pay wages to their workers. In this study, I analyze both unconstrained and constrained firms and find that the risk associated with labor leverage plays an important part on how much cash companies can hold. I find that unconstrained firms have higher levels of cash holdings to cover the labor leverage liability, while constrained firms are not able to hold cash because of their constrained nature. These results are robust to alternative specifications including and excluding industry and year dummies, as well as the use of firm fixed effects, and are mostly consistent across industries and over time.

by Ip Fung-sang, Simon. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1981. / Bibliography: leaves 103-104.

Chief Executive Offier (CEO) characteristics, such as the level of risk aversion, are known to affect corporate financial policies, and therefore are likely to impact corporate liquidity decisions. We examine changes in cash holdings around CEO turnover events, a period in which discrete changes in managerial preferences and abilities are likely to have the most dramatic effect on cash holdings. Our results suggest that cash holdings increase significantly following forced departures. The increase is persistent over the successor's tenure and is robust to controls for the standard firm-level determinants of cash holdings and corporate governance characteristics. We find that higher cash holdings arise mainly through the management of net working capital, as opposed to asset sales or reductions in investment. This suggests that the changes are optimal for shareholders rather than an indication of serious agency problems. This conclusion is supported further by our finding that the marginal value of cash does not decrease following the turnover.

Corporate cash holdings is a topic constantly under review, companies hoarding cash are criticized by shareholders who rather have companies using their cash for new investments or dividend payouts. Recent academic research has discovered that levels of cash holding are high in times when risk is deemed to be high and found that levels of corporate cash holdings are substantially higher than they used to, making more coverage and a better understanding of the phenomenon crucial. This thesis is investigating an aspect of the interconnection between corporate cash holdings and shareholders by examining if there is a relationship between the level of corporate cash holdings and the risk of the company stock. This research is conducted on the Stockholm Stock Exchange during the four year period of 2009-2012 and investigates for a relationship not only on the entire stock exchange but also for each size and sector individually. In order to investigate this relationship a cash to assets ratio has been employed to represent the level of corporate cash holdings and the measures of stock beta and volatility are used to represent the risk of the stock. The cash holding ratio is tested for a relationship with both beta and volatility separately using the Spearman’s rank correlation coefficient. This thesis have adopted a quantitative research and implemented an archival research strategy by using official records and numbers. Through these statistical tests this thesis establishes significant relationships between both the cash holding ratio and stock beta and stock volatility separately for the entire stock exchange and some differences arises between different sizes and sectors. For cash holding and stock beta a negative correlation relationship has been discovered for the entire sample, the medium cap size and the health care and industrial sectors. For cash holdings and stock volatility positive correlation findings have been made for the entire sample as well as the small cap size and the sectors of basic materials, health care and technology. This finding implicates that cash holdings to some extent relates stock risk and several potential explanations to this relationship are given and connected to well-established financial theories.

Mountain holding in the 21st century – difficulties and possibilities   This study examines the difficulties and possibilities that mountain holding farmers have today. The following questions were considered: i) Who is cultivating mountain holdings today? ii) Which is the most important reason to keep animals there? iii) What kind of subsidies are most common? iv) What kinds of animals and what breeds are the most common? v) For how long period of time are the animals kept at the mountain holdings every season? vi) How are the fundamental regulations in the animal welfare law being followed, and are there any problems/conflicts in keeping animals at the mountain holdings? vii) What meaning do the animals have for the farmers and what are the farmer’s thoughts about the future? A survey based on these issues was sent out to 107 mountain holdings farmers with animals on grazing land, where 59 % submitted a response. The results showed that knowledge on how to keep animals at the mountain holdings was overall good. The biggest difficulties for the farmers were not following the current regulations but an increased number of predators and poor profitability. 45 % of 62 responders thought predators were a problem and 35 % that poor profitability was a problem. The possibilities that farmers have are mostly to focus their resources on tourism. Today we talk about biological diversity, locally produced and national particularities, and from this study I think that the mountain holdings have several important functions to fill there.

Firms that face seasonal demand account for an important fraction of the U.S. economy. However, there is surprisingly little evidence on these firms' financing decisions. Yet, studying these decisions provides a natural setting to shed light on the types of capital (i.e. cash or debt) that firms use to manage short-term financing needs. Using seasonal firms as a setting to examine this issue, I show that seasonal financing needs are met with debt with low exposure to information asymmetry, such as short-term debt and trade credit. I further show that cash reserves, which have high carrying costs and can at time lead to agency problems, are not used for seasonal financing needs. Further, as financial flexibility theory would predict, I document that seasonal firms maintain more conservative financial policies to increase the ability to use debt for short-term financing needs. Specifically, seasonal firms are less levered and have long-term debt with a longer average maturity. Further, seasonal firms adjust toward leverage targets slower during fiscal quarters when debt is used for short-term financing. Overall, my findings indicate that firms minimize costs associated with short-term financing needs by using debt with low issuance costs and the use of this debt impacts the overall capital structure of the firm.

I explore the passage of wrongful discharge laws by U.S. state courts that allow workers to sue employers for unjust dismissal as an exogenous increase in employee firing costs. I find that firms reduce debt ratios following the adoption of these laws, and this result is strongest for subsamples of firms that experience larger increases in expected firing costs. Following the passage of these laws, firms also increase cash holdings, firms save more cash out of cash flows, and investors place a higher value on each additional dollar of cash holdings. Overall, my results indicate that employee firing costs can have an important impact on corporate financial policy decisions.

隨著2007年美國次貸危機爆發而引起的金融海嘯，對全球經濟造成了巨大的負面衝擊，至今仍還未完全恢復。在後金融海嘯時代下，企業從外部資本市場可獲得的融資往往較為困難，資本市場的流動性短缺成為常態，因此導致企業本身的資本累積更為重要。在此情況中，許多企業傾向於持有大量的現金及約當現金。 本研究旨在探討1992年至2012年間的美國企業之現金影響因子，並檢視各個現金持有影響因子對現金比率之影響方向，並把樣本分別以企業規模大小、有無財務限制和年度進行實證分析。 本研究實證指出在全體樣本的迴歸結果，可以發現影響美國企業現金持有比率的影響因子主要有：企業規模、負債比率、總資產報酬率、淨營運資金比率、研究發展費用佔淨銷售額比率、併購佔總資產比率、資本支出比率、市值對淨值比率與股利發放情形，只有現金流量比率不具顯著性。實證結果支持動機理論、融資順位理論和資訊不對稱理論，並符合預期之變動方向。

In the first essay, "The Source of Cash and Its Marginal Value," we study the relation between the source of firms' cash holdings and the value of the cash to shareholders. The marginal value of a dollar of cash holdings depends on the source of the dollar: $1.00 of cash has a value of $1.27 when it is from operations, $0.80 when from financing, and $0.46 when from investing. Within the same source, the marginal value of an added dollar of cash holdings is significantly higher than the absolute value of a subtracted dollar. Shareholders of financially constrained or distressed firms value incremental cash holdings from almost any source more highly than do shareholders of unconstrained or stronger firms, but differences in value remain across the sources of cash within each subsample. Agency costs and information asymmetry are two frictions that appear to have the largest impact upon the value of cash. In the second essay, "Explanations for Diverging Values of Cash," we further explain the differing values of cash found in the first essay. Intertemporal relationships among the sources and uses of cash provide a rational basis for shareholders to assign different values of cash based on the source. Sources of cash provide information about likely uses of cash up to two to three years in the future, and many of the intertemporal relations are statistically and economically significant. Likewise, prior uses of cash relate significantly to later uses of cash. Past sources of cash inform investors about likely future sources, even up to five years into the future. The fact that different kinds of cash flows have predictive power for future cash flows helps explain the wide range of the values of cash associated with different sources.

Zugl.: Diss. / Titel auf der Beil.