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International diversification and corporate cash holding behavior: what happens during economic downturns?

Benkraiem, Ramzi, Lakhal, Faten, 1978-, Zopounidis Konstantinos

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URIhttp://purl.tuc.gr/dl/dias/533F7237-4BFE-43C4-B545-3F83D0E1D2E3-
Identifierhttps://doi.org/10.1016/j.jebo.2019.12.016-
Identifierhttps://www.sciencedirect.com/science/article/pii/S0167268119303993-
Languageen-
Extent10 pagesen
TitleInternational diversification and corporate cash holding behavior: what happens during economic downturns?en
CreatorBenkraiem, Ramzien
CreatorLakhal, Faten, 1978-en
CreatorZopounidis Konstantinosen
CreatorΖοπουνιδης Κωνσταντινοςel
PublisherElsevieren
Content SummaryThis study uses fixed-effect regressions estimated with heteroskedasticity-consistent standard errors to investigate the effect of international diversification on corporate cash holding behavior of French-listed firms during economic downturns. The findings show that internationally diversified firms are less inclined to save cash out of their cash flows than their undiversified counterparts. However, during economic downturns, the relationship shifts and shows that international diversification is positively associated with the propensity of firms to save cash out of their cash flows. The negative relationship between international diversification and the propensity of firms to save cash out of their cash flows suggests that risk-reducing effects coupled with easy access to external finance prevail over the high agency costs and information asymmetry associated with international companies. However, during economic slumps, this relationship becomes positive, highlighting a significant influence of the financial crisis on internationally diversified firms relative to their stand-alone counterparts. Thus, this study should provide useful insights for academics, practitioners as well as financial regulators.en
Type of ItemPeer-Reviewed Journal Publicationen
Type of ItemΔημοσίευση σε Περιοδικό με Κριτέςel
Licensehttp://creativecommons.org/licenses/by/4.0/en
Date of Item2022-03-18-
Date of Publication2020-
SubjectInternational diversificationen
SubjectCash holding behavioren
SubjectFinancial environmenten
SubjectEconomic crisisen
Bibliographic CitationR. Benkraiem, F. Lakhal, and C. Zopounidis, “International diversification and corporate cash holding behavior: what happens during economic downturns?,” J. Econ. Behav. Organ., vol. 170, pp. 362–371, Feb. 2020, doi: 10.1016/j.jebo.2019.12.016.en

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