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Décamps, Jean-Paul
, Gryglewicz, S., Morellec, E. and Villeneuve, Stéphane
(2017)
Corporate Policies with Temporary and Permanent Shocks.
Review of Financial Studies, 30 (1).
pp. 162-210.
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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: | Article |
|---|---|
| Language: | English |
| Date: | January 2017 |
| Refereed: | Yes |
| 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), TSM Research (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 01 Sep 2016 10:06 |
| Last Modified: | 02 Apr 2021 15:54 |
| OAI Identifier: | oai:tse-fr.eu:30656 |
| URI: | https://publications.ut-capitole.fr/id/eprint/22338 |
Available Versions of this Item
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Corporate Policies with Temporary and Permanent Shocks. (deposited 16 Mar 2015 14:55)
- Corporate Policies with Temporary and Permanent Shocks. (deposited 01 Sep 2016 10:06) [Currently Displayed]
