The Savings of Corporate Giants

36 Pages Posted: 2 Apr 2020 Last revised: 6 Apr 2022

See all articles by Olivier Darmouni

Olivier Darmouni

Columbia University - Columbia Business School

Lira Mota

Columbia University - Columbia Business School, Finance

Multiple version iconThere are 2 versions of this paper

Date Written: April 6, 2022

Abstract

We construct a novel panel dataset to provide new evidence on how the largest nonfinancial firms manage their financial assets. Our granular data shows that, over the past decade, bond portfolios have grown to be at least as large as cash-like instruments, driven by the meteoric rise of corporate bond holdings. To shed light on the drivers of this growth, we conduct a pair of event studies around the 2017 tax reform and the 2020 liquidity crisis. Our new data suggests that the financial portfolios of corporate giants are primarily driven by cross-border tax incentives rather than liquidity motives.

Keywords: Superstar firms, corporate cash, corporate bonds, repatriation tax, liquidity management

JEL Classification: G32, G35, G11, E440

Suggested Citation

Darmouni, Olivier and Mota, Lira, The Savings of Corporate Giants (April 6, 2022). Available at SSRN: https://ssrn.com/abstract=3543802 or http://dx.doi.org/10.2139/ssrn.3543802

Olivier Darmouni (Contact Author)

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Lira Mota

Columbia University - Columbia Business School, Finance ( email )

NY
United States
10027 (Fax)

HOME PAGE: http://sites.google.com/view/liramota

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