Determinantes del nivel de efectivo de las compañías colombianas

David Yepes; Diego Restrepo-Tobón

doi:10.17533/udea.le.n85a08

Authors

David Yepes EAFIT University
Diego Restrepo-Tobón EAFIT University

DOI:

https://doi.org/10.17533/udea.le.n85a08

Keywords:

cash holdings, cash holding determinants, underinvestment risk, refinancing risk, access to finance

Abstract

This paper researches the evolution of cash holdings and cash holding determinants for Colombian firms. Using information from financial statements from 2005 to 2012, and by implementing a dynamic panel analysis using a two-step generalized method of moments (GMM2) approach, the partial adjustment behavior of cash holdings and the links between cash holdings and firm size, risk, dividend payment, net working capital and the tax rate are studied, which are all explained by the trade-off model. Analogously, the relations of cash holdings with both cash flow and investment are explained using the financing hierarchy theory. In addition, evidence on precautionary motives are found that explains how firms reduce both refinancing risk and underinvestment risk through increasing their level of cash holdings.

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Author Biographies

David Yepes, EAFIT University

Professor of the Department of Finance, School of Economics and Finance, EAFIT University.

Diego Restrepo-Tobón, EAFIT University

Professor of the Department of Finance, School of Economics and Finance, EAFIT University.

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