The effects of cash holdings on corporate performance during a credit crunch: evidence from the sub-prime mortgage crisis

Adjei, Frederick

doi:10.1007/s12197-011-9177-8

Cited by 9 publications

(25 citation statements)

References 23 publications

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“…Maintaining cash levels has a strong positive impact on a company's financial performance, especially when the company faces a crisis situation. The cash held will play a role in preventing financial constraints and providing assistance when financial constraints have occurred (Adjei, 2013;Alnori, 2020;Lozano & Yaman, 2020). The Covid-19 pandemic has also increased uncertainty in the organizational environment which has a significant impact on financial difficulties (Bui & Thach, 2022).…”

Section: Theoretical Basicmentioning

confidence: 99%

“…Several researchers have agreed on the link between cash flow and financial difficulties (Murty & Misra, 2004;Rodgers, 2011;Ward, 1994;Yap et al, 2012;Phan et al, 2022). The cash held will play a role in preventing financial problems and providing assistance when financial problems occur (Abani et al, 2021;Adjei, 2013;Alnori, 2020;Lozano & Yaman, 2020). Cash flow from operating activities is significant to financial difficulties (Romadhina et al, 2022).…”

Section: Introduction *mentioning

confidence: 99%

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Understanding The Cash Flow Impact on Financial Distress among Hospitality Listed Firms Amidst the Covid-19 Pandemic: The Case of Indonesia

Pratiwi,

Wahyuni,

Adrianto

2024

Quant. Econ. Manag. Stud.

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This study investigates the relationship between cash flow variables and financial distress among hospitality companies listed on the Indonesian stock market between 2017 and 2022. Analysis focused on Operating Cash Flow (OCF), Investment Cash Flow (ICF), and Financial Cash Flow (FCF) to discern their individual and combined impacts on financial distress. The findings reveal that each cash flow variable—OCF, ICF, and FCF—exerts a significant influence on financial distress when considered independently. This supports hypotheses 1, 2, and 3, signifying their substantial role in shaping the financial health of these companies. Additionally, the collective effect of these cash flow variables, as evidenced by the F-test, demonstrates a noteworthy combined impact on financial distress. In summary, this study highlights the intricate interplay between cash flow dynamics and financial distress among Indonesian-listed private companies. While each cash flow component independently affects financial stability, their cumulative influence significantly determines vulnerability to financial distress. This underscores the critical need for comprehensive cash flow management strategies to mitigate financial risks and ensure sustained financial health in these entities amidst economic uncertainties.

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Section: Theoretical Basicmentioning

confidence: 99%

Section: Introduction *mentioning

confidence: 99%

Understanding The Cash Flow Impact on Financial Distress among Hospitality Listed Firms Amidst the Covid-19 Pandemic: The Case of Indonesia

Pratiwi,

Wahyuni,

Adrianto

2024

Quant. Econ. Manag. Stud.

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“…It is possible to argue from this result that they need less credit than before. Frederick Adjei [12] using data from 2006-2008 for publicly traded firms comes to the conclusion that firms with low cash reserves had a lower performance during the subprime crisis. By contrast, firms with high levels of cash can better minimize the risk of bankruptcy.…”

Section: Review Of Literaturementioning

confidence: 99%

Credit Crunch in Europe: Comparing Austria, Italy and Greece

Catelani¹

2015

aeb

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Since the debt crises of some European countries in 2011, the European Central Bank and some credit and financial authorities have often spoken about a credit crunch in Europe. They have said that banks have curbed credit access to the economic system, creating persistent problems for the European economy. The aim of this paper is to analyze the problem of the credit crunch in Europe from 2007 to 2014, taking as our sample three European countries: Austria, Italy and Greece. These are countries with different economic structures, so they represent a significant sample for our purposes. Using statistical analysis, we will measure the entity of the credit crunch. We will find that the credit crunch is indeed present in Europe, but maybe is not as dramatic as has been described.

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“…Esse tema voltou a ganhar maior relevância no mundo a partir da crise financeira internacional de 2008 (Almeida et al, 2014), quando as instituições financeiras norte-americanas foram as primeiras afetadas pela crise no mercado de hipotecas arriscadas (sub-prime mortgage) e, diante das grandes perdas que tiveram, reduziram significativamente a disponibilidade de crédito para as empresas, que precisaram contar com seus próprios recursos para honrar seus compromissos financeiros e financiar a continuidade de suas operações (Adjei, 2013).…”

Section: Introductionunclassified

Impacto da posição de caixa na performance das empresas brasileiras em períodos de recessão econômica

Bortoluzzo

Bortoluzzo²,

Ferreira

2023

RAM, Rev. Adm. Mackenzie

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Resumo Objetivo: O presente trabalho analisa se, em momentos de recessão econômica, a posição de caixa tem impacto na performance das empresas brasileiras. Além disso, busca-se identificar se há diferenças na intensidade dessa relação para os diferentes setores de atuação das empresas. Originalidade/valor: A adequada gestão da liquidez das empresas é fundamental para a manutenção da sua saúde financeira e para a sua sustentabilidade econômica em longo prazo. Esse tema é especialmente importante em países emergentes, como o Brasil, que tem um histórico de frequentes recessões econômicas. As recessões levam à piora dos resultados operacionais das empresas e à escassez de linhas de crédito e, portanto, afetam negativamente a liquidez das companhias. Na última década, tem sido discutida a importância do uso de caixa pelas empresas para melhorar sua performance em períodos de restrição financeira. Design/metodologia/abordagem: Para desenvolver este estudo, foi utilizada uma amostra de 200 empresas listadas na B3, agrupando informações do período de 2013 a 2016, organizadas em um painel dinâmico balanceado. Resultados: Os resultados obtidos por meio das regressões indicam que há relação positiva e estatisticamente significante entre a posição de caixa e a performance medida pelo ROA (mas não pelo market to book). Identificou-se também que o setor de atuação da empresa modera a intensidade dessa relação.

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The effects of cash holdings on corporate performance during a credit crunch: evidence from the sub-prime mortgage crisis

Cited by 9 publications

References 23 publications

Understanding The Cash Flow Impact on Financial Distress among Hospitality Listed Firms Amidst the Covid-19 Pandemic: The Case of Indonesia

Understanding The Cash Flow Impact on Financial Distress among Hospitality Listed Firms Amidst the Covid-19 Pandemic: The Case of Indonesia

Credit Crunch in Europe: Comparing Austria, Italy and Greece

Impacto da posição de caixa na performance das empresas brasileiras em períodos de recessão econômica

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