The Determinants of Corporate Cash Holdings in the Nordic Countries

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School of Business | Bachelor's thesis
Electronic archive copy is available locally at the Harald Herlin Learning Centre. The staff of Aalto University has access to the electronic bachelor's theses by logging into Aaltodoc with their personal Aalto user ID. Read more about the availability of the bachelor's theses.

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Date

2019

Department

Rahoituksen laitos

Major/Subject

Mcode

Degree programme

Rahoitus

Language

en

Pages

21

Series

Abstract

This thesis examines the determinants of corporate cash holdings for publicly traded firms in the Nordic countries using panel data from 2009-2018. The average cash-to-assets ratio increases over 45% with a significant upward trend over the sample period. My results suggest that firms with riskier activities and valuable investment opportunities tend to hold more cash than other firms. On the contrary, firms with greater access to capital markets and cash substitutes hold less cash. These findings are consistent with the view that firms hold cash to ensure that they can fund their growth options even in the face of uncertainty and high transaction costs of outside funding.

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Thesis advisor

Joenväärä, Juha

Keywords

Cash holdings, liquidity, Excess cash, Nordic countries

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https://urn.fi/URN:NBN:fi:aalto-201912296778

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[kand] Kauppakorkeakoulu / BIZ