Cash Holdings, Firm Value and the Role of Market Imperfections. A Cross Country Analysis

  • Giorgio Calcagnini
  • Adam Gehr
  • Germana Giombini
Part of the Contributions to Economics book series (CE)


In this paper we evaluate the empirical importance of the contemporaneous presence of financial and labor market imperfections by studying cross-country differences in market valuations of listed companies and firms’ cash holdings. Our results show that, as expected, financial market imperfections are positively correlated with firms’ cash holdings and that the latter are larger wherever employment protection laws (EPL) are stricter. Moreover, stock markets value liquid companies less in economies with higher EPL levels.


Cash Flow Financial Distress Cash Holding Liquid Asset Employment Protection Legislation 
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Copyright information

© Springer Physica-Verlag Berlin Heidelberg 2010

Authors and Affiliations

  • Giorgio Calcagnini
    • 1
  • Adam Gehr
    • 2
  • Germana Giombini
    • 1
  1. 1.Department of Economics and Quantitative MethodsUniversità di Urbino “Carlo Bo”UrbinoItaly
  2. 2.Department of FinanceDePaul UniversityChicagoUSA

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