Journal Article
Are Firms Hoarding Cash Post-Pandemic
Abstract: Cash holdings rose to record levels following the pandemic, raising concerns that firms are “hoarding” cash beyond what is needed for economic use. To investigate this claim, we examine the determinants of cash holdings at public firms pre- and post-pandemic. We find that despite significant structural changes in the economy, firms’ cash allocation incentives are mostly unchanged. Investment opportunities and profitability best explain the distribution of cash across firms today, followed by precautionary motives.
Keywords: Cash holdings; firms; risk mitigation;
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https://www.kansascityfed.org/Economic%20Bulletin/documents/10224/EconomicBulletin24StedmanMarshAn0625.pdf
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Bibliographic Information
Provider: Federal Reserve Bank of Kansas City
Part of Series: Economic Bulletin
Publication Date: 2024-06-25
Pages: 4