<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The aim of the study is to examine the impact of financial constraints and financial distress on cash holdings, both in normal and crisis times. We collected the 4,406 firm-year observations of companies listed on the Warsaw Stock Exchange (WSE). Our research shows that companies maintain higher cash holdings during a crisis than in a normal period. However, in contrast to our expectations, companies with financial difficulties (constraints and distress) have lower cash holdings both in normal and crisis times. The originality of our research lies in realizing that different sources of difficulties might overlap at the same time (external with internal). We also analyze how cash holdings react to a combined impact of difficulties of different natures (external and internal). We believe that cash holdings have recently increased their meaning as we face the situation of constant and increasing uncertainty: still ongoing COVID-19 crisis prolonged with Russian aggression on Ukraine and outburst of inflation.</p>
</abstract>

The aim of the study is to examine the impact of financial constraints and financial distress on cash holdings, both in normal and crisis times. We collected the 4,406 firm-year observations of companies listed on the Warsaw Stock Exchange (WSE). Our research shows that companies maintain higher cash holdings during a crisis than in a normal period. However, in contrast to our expectations, companies with financial difficulties (constraints and distress) have lower cash holdings both in normal and crisis times. The originality of our research lies in realizing that different sources of difficulties might overlap at the same time (external with internal). We also analyze how cash holdings react to a combined impact of difficulties of different natures (external and internal). We believe that cash holdings have recently increased their meaning as we face the situation of constant and increasing uncertainty: still ongoing COVID-19 crisis prolonged with Russian aggression on Ukraine and outburst of inflation.

Impact of financial constraints and financial distress on cash holdings

International Journal of Management and Economics

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Impact of financial constraints and financial distress on cash holdings"}

The aim of the study is to examine the impact of financial constraints and financial distress on cash holdings, both in normal and crisis times. We collected...

Impact of financial constraints and financial distress on cash holdings

Article Category: Empirical Paper

Online veröffentlicht: 31. März 2023

Seitenbereich: 13 - 31

Eingereicht: 05. Apr. 2022

Akzeptiert: 14. Dez. 2022

DOI: https://doi.org/10.2478/ijme-2022-0032

Schlüsselwörter
cash holdings, COVID-19 crisis, financial constraints, financial distress, global financial crisis

© 2023 Elżbieta Bukalska et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Impact of financial constraints and financial distress on cash holdings

Article Category: Empirical Paper

Online veröffentlicht: 31. März 2023

Seitenbereich: 13 - 31

Eingereicht: 05. Apr. 2022

Akzeptiert: 14. Dez. 2022

DOI: https://doi.org/10.2478/ijme-2022-0032

Schlüsselwörtercash holdings, COVID-19 crisis, financial constraints, financial distress, global financial crisis

© 2023 Elżbieta Bukalska et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Schlüsselwörter
cash holdings, COVID-19 crisis, financial constraints, financial distress, global financial crisis