Understanding Precautionary Cash at Home and Abroad

In the presence of market frictions, it is optimal for firms to stockpile cash to fund investment projects which may arise in the future. Prior work has documented that firms’ precautionary savings motives predict variation in the size of firms’ cash stockpiles. The dramatic run-up in cash stockpiles raises the question of why these precautionary motives have increased. In the presence of repatriation taxes, foreign and domestic cash are imperfect substitutes. We show that although precautionary motives explain variation in the level of cash held domestically, they provide little explanatory power for the level of foreign cash. Multinational firms’ foreign cash balances are instead explained by low foreign tax rates and the ability to transfer profits within the firm through related-party sales. The firms with the greatest incentive and ability to transfer income to low-tax jurisdictions do so, and this results in stockpiles of cash trapped in their foreign subsidiaries

Antenatal Magnesium and Cerebral Palsy in Preterm Infants

To evaluate the relationship of maternal antenatal magnesium sulfate (MgSO4) with neonatal cranial ultrasound abnormalities and cerebral palsy (CP)

The cost of financial flexibility: Evidence from share repurchases

Over the last two decades, share repurchases have emerged as the dominant payout channel, offering a more flexible means of returning excess cash to investors. However, little is known about the costs associated with payout-related financial flexibility. Using a unique identification strategy, we document a significant cost. We find that actual repurchase investments underperform hypothetical investments that mechanically smooth repurchase dollars through time by approximately two percentage points per year on average. This cost of financial flexibility is correlated with earnings management, managerial entrenchment, and less institutional monitoring. (C) 2016 Elsevier B.V. All rights reserved.Available online 11 February 2016. 36 month embargo.This item from the UA Faculty Publications collection is made available by the University of Arizona with support from the University of Arizona Libraries. If you have questions, please contact us at [email protected]

Credit Be Dammed: The Impact of Banking Deregulation on Economic Growth Acknowledgements: Without implicating them, we thank Credit Be Dammed: The Impact of Banking Deregulation on Economic Growth

Abstract We document substantial variation in the effect of state-level bank branching deregulation in the United States on economic growth. We examine the sources of this variation by testing multiple channels that may link deregulation and economic growth. Using a matching method that utilizes synthetic counterfactual states, we find support for the hypothesis that economic growth was associated with states where deregulation solved a capital immobility dit problem. We do not find support for other channels, which posit that banks became more efficient, financed more innovative businesses, or learned by observing prior deregulations