Hamburg Financial Research Center

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Unsere Forschungergebnisse unterstützen die gesellschaftliche Debatte rund um aktuelle finanzökonomische Fragestellungen. Durch die Veröffentlichung der Arbeiten in internationalen Fachzeitschriften und unserer Working Paper Series sollen diese für einen möglichst breiten Adressatenkreis zugänglich werden.

HFRC Working Paper Series

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Alle Working Papers
Hamburg Financial Research Center
HFRC Working Paper Series

Foreign bias in institutional portfolio allocation: The role of social trust

Hamburg Financial Research Center
HFRC Working Paper Series

Decentralized finance, crypto funds, and value creation in tokenized firms

Publikationen von Tatjana Xenia Puhan

Cyclicality of growth opportunities and the value of cash holdings

Meike Ahrends, Wolfgang Drobetz, Tatjana Xenia Puhan
Journal of Financial Stability | 08/2018
We show that business cycle dynamics and, in particular, the cyclicality of a firm’s growth opportunities, determine the value of corporate cash holdings. An additional dollar of cash is more valuable for firms with less procyclical expansion opportunities. This valuation effect is strongest for low leverage and high R&D firms, but is independent of their financial status. Corporate cash holdings provide the flexibility to invest for firms that have expansion opportunities during crisis times with business cycle downturns and supply-side financial constraints. Cash holdings in firms with less procyclical growth opportunities are associated with higher investment and better operating performance.