Abstract
Driven by fast evolution in the money market during the past two
decades, financial and technological innovations, increasing
competition, and internationalizing of businesses, cash and treasury
management has become an increasingly important function in most firms.
It is reasonable to expect that the role of financial transactions in
the cash management process in adding to firm value has increased its
importance and changed the cash management behavior of firms.
The main purpose of this study is to investigate this potential
behavioral change in cash management by examining the cash management
practices behind the models explaining the cash management behavior and
to test the stability of some of these models. It is hypothesized that
the environmental changes have been remarkable enough to change the cash
management behavior, which can be seen as a structural change in the
cash management function. The factors assumed to explain this phenomenon
may concern organizational and technological arrangements in cash
management, likewise professional skills in the area of financial
transactions and incentives for these especially created by emerging
money markets.
The examination was conducted using the survey method to map out
the best cash management practices followed by Finnish listed
manufacturing and service companies and by testing the stability of both
static and dynamic models explaining cash management behavior. The
empirical part of the study is based on three questionnaires in three
separate years, namely 1988, 1994, and 2000, and the empirical
estimation of the selected cash management models using financial
statement data for the years 1972 to 2001.
The study concludes that during the research period firms have
achieved a significant technological progress (improving systems and
methods) and significant behavioral changes (increasing professionalism)
concerning cash management practices, referring to opportunities for
more effective cash management operations. The stability tests of cash
management models indicated that a structural change in cash management
behavior occurred after the deregulation years in the money market.
These results were consistent with the surveys referring the development
in the efficiency of the firms' cash management.
| Identifer | oai:union.ndltd.org:oulo.fi/oai:oulu.fi:isbn951-42-7414-8 |
| Date | 04 October 2004 |
| Creators | Kytönen, E. (Erkki) |
| Publisher | University of Oulu |
| Source Sets | University of Oulu |
| Language | English |
| Detected Language | English |
| Type | info:eu-repo/semantics/doctoralThesis, info:eu-repo/semantics/publishedVersion |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess, © University of Oulu, 2004 |
| Relation | info:eu-repo/semantics/altIdentifier/pissn/1455-2647, info:eu-repo/semantics/altIdentifier/eissn/1796-2269 |
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