Are US firms stockpiling too much cash?

Marcum, Bill; Martin, Dale R.; Strickland, Dorothy

doi:10.1002/jcaf.21716

Cited by 2 publications

(2 citation statements)

References 16 publications

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“…First, a dramatic increase in cash reserves has been noticed in both U.S. firms and firms abroad in recent years (Almeida et al, ; Bates, Chang, & Chi, ; Cole, ; Le Guyader, ; Marcum, Martin, & Strickland, ; Marcum, Martin, & Strickland, ; Orlova & Rao, ; Phan, Nguyen, Nguyen, & Hegde, ; Prescott, ). Among nonfinancial S&P 500 firms, cash holdings increased fivefold from 1996 to 2012, reaching $1,334 billion (Almeida et al, ).…”

Section: Introductionmentioning

confidence: 99%

What Do We Know About Corporate Cash Holdings? A Systematic Analysis

Cruz¹,

Kimura²,

Sobreiro³

2019

J Corp Accounting Finance

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Cash holdings play an important role at the heart of firms' policies. Researchers have devoted considerable attention to the dramatic increase in cash reserves despite alternative instruments such as debt, derivatives, and credit lines. The finance literature discusses the antecedents and determinants of cash holdings as well as the different reasons for firms to hold cash. In this paper, we present a systematic literature review of cash holdings in the finance field. The major studies in this area are classified and coded, and a research agenda and recommendations that may advance the field are discussed. © 2019 Wiley Periodicals, Inc.

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Section: Introductionmentioning

confidence: 99%

What Do We Know About Corporate Cash Holdings? A Systematic Analysis

Cruz¹,

Kimura²,

Sobreiro³

2019

J Corp Accounting Finance

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“…As established in several previous articles, American corporations have accumulated significant amounts of cash offshore, resulting in relatively high liquidity balances (Cole, ; Le Guyader, , , ; Marcum, Martin, & Strickland, ). U.S. corporations have an incentive to keep cash offshore that is generated from profitable operations in relatively low‐tax, foreign jurisdictions because repatriations to the United States can trigger significant tax liabilities.…”

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confidence: 92%

The Strategic Use of Short‐Term Loans to Access Offshore Cash

Schultz¹,

Tang²

2015

J Corp Accounting Finance

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In times of uncertainty, maintaining a strong cash position generally enhances a corporation's financial flexibility; however, holding significant cash balances offshore to avoid tax consequences associated with repatriations can make the amounts unavailable for use in the United States. A viable, tax‐effective strategy for U.S. multinational corporations seeking to access offshore cash is to structure short‐term, intercompany loans from their subsidiaries operating as foreign controlled corporations. By coordinating the treasury and tax functions in this area, corporations can successfully address the applicable IRS rules while providing liquidity to support domestic operations. © 2015 Wiley Periodicals, Inc.

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Are US firms stockpiling too much cash?

Cited by 2 publications

References 16 publications

What Do We Know About Corporate Cash Holdings? A Systematic Analysis

What Do We Know About Corporate Cash Holdings? A Systematic Analysis

The Strategic Use of Short‐Term Loans to Access Offshore Cash

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