Macroeconomics

Financial system

Linguistics

Philosophy

Chromatography

Government (linguistics)

Panel data

Cash conversion cycle

Cash

Economics

Market liquidity

Business

Cash management

Economic shortage

Endogeneity

Management

Monetary economics

Econometrics

Cash flow forecasting

Chemistry

Sample (material)

Finance

Flexibility (engineering)

Financial crisis

Borsa Istanbul Review

This study investigates the impact of the global financial crisis on the determinants of corporate cash holdings and adjustments towards target cash levels using a sample of Eastern European firms. Employing panel fixed effects and GMM estimations, the results reveal that firm-level determinants of cash holdings significantly differ for pre- and post-crisis periods. Moreover, we find significantly lower adjustment speed to attain the optimal cash level in the post-crisis period. Our results are robust to correction for endogeneity. These results hold important implications for Eastern European firms, which are significantly afflicted by the global financial crisis in terms of liquidity shortage and limited financial flexibility.

The impact of the global financial crisis on corporate cash holdings: Evidence from Eastern European countries