38 Pages Posted: 26 Apr 2005
Date Written: December 2004
This work analyses the explanatory factors of the cash holdings of a sample of 860 small and medium-sized firms from Spain during the period 1997-2001. We find that the firms pursue a target cash level to which they attempt to converge, and that this level is higher for firms with larger cash flows, for those that are more highly leveraged and for those that have more short-term debt. In contrast, the cash level falls with the use of bank debt and in the presence of substitutes for cash.
Keywords: Cash, Liquidity, SMEs
JEL Classification: G31, G32
Suggested Citation: Suggested Citation
García-Teruel, Pedro J. and Martínez-Solano, Pedro, On the Determinants of SMEs Cash Holding: Evidence from Spain (December 2004). Available at SSRN: https://ssrn.com/abstract=695163 or http://dx.doi.org/10.2139/ssrn.695163
By Amir Sufi