Do U.S. Firms Hold More Cash than Foreign Firms Do?

Lee Pinkowitz; René M. Stulz; Rohan Williamson

doi:10.1093/rfs/hhv064

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Do U.S. Firms Hold More Cash than Foreign Firms Do?

Lee Pinkowitz¹; René M. Stulz²; Rohan Williamson¹

¹ Georgetown University · ² The Ohio State University

Review of Financial Studies 2016

From 1998 to 2011, U.S. firms held more cash on average (but not at the median) than similar foreign firms (foreign twins) did. The average difference in cash holdings does not increase after 2008, and it is driven by highly R&D-intensive U.S. firms. Because there are almost no similarly R&D-intensive foreign firms, mean comparisons involving these U.S. firms are not reliable. Without these U.S. firms, neither U.S. multinational firms nor purely domestic U.S. firms hold more cash than their foreign twins do. Country characteristics have negligible explanatory power for differences in cash holdings between U.S. firms and their foreign twins. Received April 17, 2014; accepted August 4, 2015 by Editor David Denis.

DOI: 10.1093/rfs/hhv064
Volume: 29 (2)
Pages: 309-348
Language: en
Export: BibTeX
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