Disasters keep damaging infrastructure, disrupting supply chains and affecting firm profitability. There is an urgent need for better understanding of disaster impact on supply chains but very few publications address this issue. This exploratory study takes an indirect approach and investigates disaster impact on firms in various industry sectors. This approach allows us to take full advantage of large secondary data bases of firm and disaster data in order to analyze the impact of over 3,500 disasters on more than 100,000 firm‐year observations over 15 years. Our results indicate that disasters impact all sectors within a supply chain. We found that damage by windstorms and floods seem to be dramatically different from that of an earthquake, providing evidence against the all‐hazards approach. We also show that the impact of floods on total asset turnover of a firm is dependent on the firm's position in the supply chain. We found that while upstream partners enjoy a positive impact, downstream partners have to plan for the opposite. Supply chain managers can use our results to better understand disaster impact on their business. Our study suggests a supply chain–wide mitigation strategy rather than a company‐specific one.
This study examines the determinants and implications of nonprofit cash holdings. Based on agency theory and traditional literature of cash holdings, the author develop and test a number of predictions about nonprofit cash holdings. Several important findings can be highlighted. Nonprofit cash holdings do not seem to be detrimental to nonprofits; in fact, their levels can be explained with traditional precautionary and speculative motives. Additionally, governance and managerial proxies indicate that nonprofit cash holdings may not be a function of agency problems. Consistent with a harmless interpretation of cash holdings, nonprofits with higher excess cash tend to invest more in land, buildings, and equipment than those that hold less cash. Finally, donors do not penalize organizations that hold high levels of cash.
We examine the relations between national cultures, the multinationality of the firm and its holdings of cash. We develop several hypotheses from well known corporate finance theories and theories of the multinational firm, positing that cultural factors as well as the degree of multinationality of firms influence their decisions to hold cash. In particular, firms in countries with high uncertainty avoidance, as a national culture, hold more cash as a way to hedge against undesired states of nature. Furthermore, as a reflection of their longer business cycles, multinational firms typically hold more cash. At the same time, however, the multinationality of the firm moderates the effects of culture on the firm's decision to hold liquid assets. Based on a large panel of firms in forty countries, we present evidence consistent with these hypotheses. While firms in countries with high levels of uncertainty avoidance tend to hold more cash, the degree of multinationality of the firm is positively correlated with holdings of cash. On the other hand, the effect of national culture on firm's cash holdings is lower for multinationals.
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