Distance produces the fear of loss Customer geographic proximity and corporate cash holdings
发布日期:2023/2/10
作者: 段堃 高杨 Mishra. T Satchell. S
单位: 华中科技大学经济学院 英国南安普顿大学 英国剑桥大学
期刊: Journal of International Financial Markets, Institutions & Money, 2023年
Abstract
Suppliers usually worry about losing important customers far away. This study examines the effect of long-distance customers on the supplier's cash holdings in China. We find that firms with long-distance major customers tend to hold more cash holdings, and the exogenous opening of the high-speed rail can reduce the effects of distant customers. Our results still hold when considering the endogeneity concerns. The cross-sectional tests suggest that the impact of long-distance customers is more pronounced for firms that have fewer accounts receivables and a larger customer concentration. Furthermore, we document that suppliers with a long-distance supply chain relationship hold more cash mainly due to the precautionary motive. Overall, we highlight that the distance between suppliers and customers is an important factor that affects a firm's cash holdings policy, and we also provide some suggestions for both suppliers and policymakers.
ISSN号:1042-4431
链接:Distance produces the fear of loss: Customer geographic proximity and corporate cash holdings - ScienceDirect