Cash Holdings and Firm Value during Latin American Financial Crises
نویسنده
چکیده
We investigate the determinants of cash holdings and firm value of Latin American firms during the Mexican crisis of 1994-1995 and the Brazilian crisis of 1999. We find that each crisis alters the determinants of cash and firm value differently. Larger firms increase their cash holdings during the Mexican crisis, while cross-listed firms increase their holdings of cash during the Brazilian crisis. In addition, during the Brazilian crisis we find an increase in ownership concentration is more value-enhancing for high-cash firms. Our findings suggest that while illiquidity may become more severe during crises, agency costs are also an important factor. JEL classification: G30; G32
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