Is saving vital? Evidence from the financial crisis

We use a sample of 8,869 firm-years from the highly regulated Main Market (MAIN) and relatively unregulated Alternative Investment Market (AIM) in the United Kingdom to analyse the impact of financial restrictions on optimal cash holdings in the context of financial crises. Employing system generalised methods of moments, we find that AIM firms have a faster adjustment speed of cash as confirmed by precautionary and transaction motives over 2001-2017. However, AIM firms decrease (increase) their adjustment speed of cash more than MAIN firms during (after) the financial crises.

• Publication year

  2020

• Venue

  Economics and Business Letters

• Publication date

  2020-03-11

• Fields of study

  Business, Economics

• Identifiers
  DOI 10.17811/ebl.9.2.2020.124-134
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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