On the Determinants of Smes Cash Holding: Evidence from Spain

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

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

Pedro J. García-Teruel

University of Murcia ( email )

Department of Management and Finance
Murcia, 30100
34 868887828 (Phone)
34 868887537 (Fax)

HOME PAGE: http://webs.um.es/pjteruel/miwiki/doku.php

Pedro Martínez-Solano (Contact Author)

University of Murcia ( email )

Dpt. Management and Finance
Murcia, Murcia 30100
34 868 883 747 (Phone)
34 868 887 537 (Fax)

HOME PAGE: http://webs.um.es/pmsolano

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