The Savings of Corporate Giants

39 Pages Posted: 27 May 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 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: corporate bonds, corporate cash, Liquidity management, repatriation tax, Superstar Firms

Suggested Citation

Darmouni, Olivier and Mota, Lira, The Savings of Corporate Giants (April 2022). CEPR Discussion Paper No. DP17192, Available at SSRN: https://ssrn.com/abstract=4121367

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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