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Décamps, Jean-Paul
, Gryglewicz, S., Morellec, E. and Villeneuve, Stéphane
(2015)
Corporate Policies with Temporary and Permanent Shocks.
TSE Working Paper, n. 15-552, Toulouse
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Abstract
We develop a dynamic model of investment, financing, liquidity and risk manage- ment policies in which firms face financing frictions and are subject to permanent and temporary cash ow shocks. In this model, the cash- ow sensitivity of cash increases with financing constraints and cash ow volatility. Persistence of cash ow shocks and volatility of permanent shocks help manage corporate liquidity. Temporary shocks volatility hinders it. More profitable firms access equity markets less often but raise more funds when doing so. Hedging permanent or temporary shocks may involve op- posite positions. Derivatives usage and asset substitution are not equivalent when hedging permanent shocks.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | January 2015 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Corporate policies, permanent vs, temporary shocks, financing frictions |
| JEL Classification: | F32 - Current Account Adjustment; Short-Term Capital Movements G31 - Capital Budgeting; Fixed Investment and Inventory Studies G35 - Payout Policy |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 16 Mar 2015 14:55 |
| Last Modified: | 02 Apr 2021 15:49 |
| OAI Identifier: | oai:tse-fr.eu:28979 |
| URI: | https://publications.ut-capitole.fr/id/eprint/16689 |
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