Research Discussion Paper – RDP 2016-03 Why Do Companies Hold Cash?

Contents

• Introduction
• Institutional Background
• Identification
• Data
• Stylised Facts
• Results
• Extensions and Robustness Tests
• Conclusion
• Appendix A: Tax Minimisation and Cash Management Behaviour of Multinational Companies
• Appendix B: Corporate Cash and Asset Concentration
• Appendix C: Estimates of Sample Selection Bias
• Appendix D: Comparing Public and Private Company Cash: Hausman-Taylor Estimates
• References

We would like to thank Rose Kenney for assistance with the Dun and Bradstreet database. We would also like to thank Andrew Ainsworth, Jarkko Jääskelä, Christopher Kent, Tom Rosewall, John Simon, David Wakeling and seminar participants at the Reserve Bank of Australia for useful comments and suggestions. The views expressed in this paper are those of the authors and do not necessarily reflect the views of the Reserve Bank of Australia. The authors are solely responsible for any errors.