The cash-holding link within the supply chain

Using a customer–supplier matched sample of US-listed firms from 1980 to 2016, we study the corporate cash-holding relationship between suppliers and their major customers. The key findings suggest that levels are positively affected by those customers, consistent with liquidity argument. effects more pronounced when customers in favourable financial conditions they considered important suppliers. Our results robust various endogeneity problems additional tests. Taken together, these bring forth an link within supply chain.