Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 27, 2023 erstellt
Beschreibung:
This paper investigates firms’ use of precautionary savings to manage the risk of distress spillovers from supply chain partners. Firms increase cash holdings when their principal customers have a larger fraction of long-term debt maturing in one year. Analysis exploiting predetermined differences in fiscal year ends reveals that firms accumulate cash after observing customers’ debt maturity structures and before the refinancing uncertainty is resolved. The effect is concentrated in firms that are financially constrained or highly susceptible to customer distress. During the 2007 financial crisis, cash holdings prevented performance deterioration for firms whose customers had more debt prescheduled to mature