Cash Is Not King: Evidence from the Commercial Paper Market

68 Pages Posted: 13 Apr 2021

Date Written: April 9, 2021


Using new transaction-level data for non-financial commercial paper (CP) in the U.S., we show that companies systematically reduce their outstanding short-term debt on quarterly and annual disclosure dates. Constraints on CP lending supply cannot explain this pattern. Instead, firms prefer repaying short-term debt over disclosing high cash holdings to signal that their cash is readily available and not trapped in foreign subsidiaries. Consistent with this interpretation, we show that firms with higher cash holdings, more sales in regions with tight capital controls, or with higher debt-equity ratios compared to industry peers reduce their short-term debt more aggressively at disclosure dates.

Keywords: Cash, Commercial Paper, Adverse Selection, Disclosure, Window Dressing

JEL Classification: G32

Suggested Citation

Klingler, Sven and Syrstad, Olav and Vuillemey, Guillaume, Cash Is Not King: Evidence from the Commercial Paper Market (April 9, 2021). Available at SSRN: or

Sven Klingler (Contact Author)

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442

Olav Syrstad

Norges Bank ( email )

P.O. Box 1179
Oslo, N-0107

Guillaume Vuillemey

HEC Paris ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics