Firms cash management, adjustment cost and its impact on firms’ speed of adjustment: a cross country analysis
Abstract We investigate the firms’ specific attributes that determine the difference in speed of adjust- ment (SOA) towards the cash holdings target in the Scandinavian countries: Denmark, Norway and Sweden. We examine whether Scandinavian firms maintain an optimal level of cash holdings and determine if the active cash holdings management is associated with the firms’ higher SOA and lower adjustment costs. Our findings substantiate that a higher level of off-target cost...