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| Title | Saving for a rainy day: Evidence from the 2000 dot-com crash and the 2008 credit crisis |
| Creator | 周冠男 Chen, Hsuan-Chi Chou, Robin K. Lu, Chien-Lin |
| Contributor | 財務管理學系 |
| Key Words | Cash holdings; Financial crisis; Financial distress; Value of cash |
| Date | 2018-02 |
| Date Issued | 29-Jan-2018 10:46:13 (UTC+8) |
| Summary | This article examines the role of pre-saved cash in helping financially constrained firms during the 2000 dot-com crash and the 2008 financial crisis, both of which were exogenous shocks to industrial firms. The results show that constrained firms tended to increase capital investments during these severe economic downturns if they had pre-saved more cash. Constrained firms instead exhibited lower excess returns and incurred higher likelihoods of financial distress during the severe downturns if they had saved less cash prior to the events. Firms that experienced the 2000 dot-com crash and saved cash thereafter were less likely to default during the 2008 financial crisis, indicating the existence and benefit of learning effects. This study supports a precautionary motive for cash savings, showing that pre-saved cash helps financially constrained firms fund investment and reduces the likelihood of financial distress during severe market downturns. It demonstrates that saving for a rainy day really is valuable. |
| Relation | Journal of Corporate Finance, Volume 48, Pages 680-699 |
| Type | article |
| DOI | https://doi.org/10.1016/j.jcorpfin.2017.12.025 |
| dc.contributor | 財務管理學系 | |
| dc.creator (作者) | 周冠男 | zh_TW |
| dc.creator (作者) | Chen, Hsuan-Chi | en_US |
| dc.creator (作者) | Chou, Robin K. | en_US |
| dc.creator (作者) | Lu, Chien-Lin | en_US |
| dc.date (日期) | 2018-02 | |
| dc.date.accessioned | 29-Jan-2018 10:46:13 (UTC+8) | - |
| dc.date.available | 29-Jan-2018 10:46:13 (UTC+8) | - |
| dc.date.issued (上傳時間) | 29-Jan-2018 10:46:13 (UTC+8) | - |
| dc.identifier.uri (URI) | http://nccur.lib.nccu.edu.tw/handle/140.119/115633 | - |
| dc.description.abstract (摘要) | This article examines the role of pre-saved cash in helping financially constrained firms during the 2000 dot-com crash and the 2008 financial crisis, both of which were exogenous shocks to industrial firms. The results show that constrained firms tended to increase capital investments during these severe economic downturns if they had pre-saved more cash. Constrained firms instead exhibited lower excess returns and incurred higher likelihoods of financial distress during the severe downturns if they had saved less cash prior to the events. Firms that experienced the 2000 dot-com crash and saved cash thereafter were less likely to default during the 2008 financial crisis, indicating the existence and benefit of learning effects. This study supports a precautionary motive for cash savings, showing that pre-saved cash helps financially constrained firms fund investment and reduces the likelihood of financial distress during severe market downturns. It demonstrates that saving for a rainy day really is valuable. | en_US |
| dc.format.extent | 643529 bytes | - |
| dc.format.mimetype | application/pdf | - |
| dc.relation (關聯) | Journal of Corporate Finance, Volume 48, Pages 680-699 | |
| dc.subject (關鍵詞) | Cash holdings; Financial crisis; Financial distress; Value of cash | en_US |
| dc.title (題名) | Saving for a rainy day: Evidence from the 2000 dot-com crash and the 2008 credit crisis | en_US |
| dc.type (資料類型) | article | |
| dc.identifier.doi (DOI) | 10.1016/j.jcorpfin.2017.12.025 | |
| dc.doi.uri (DOI) | https://doi.org/10.1016/j.jcorpfin.2017.12.025 |