@article{173f1e27302b4b3ab0fd4029b140850b,
title = "Cash holding dynamics and competition intensity: Evidence from UK firms",
abstract = "Using a quasi-natural experiment and various measures of competition intensity, we examine whether an increase in product market competition is a key driver of firm cash holdings. We find that firms increase cash holdings when competition is intense. The results suggest that the degree of increase in cash holdings is magnified among firms exposed to high predatory threat and financing friction. In addition, we examine if increasing cash holdings offers a competitive advantage in the product market. Our results indicate that firms with large cash reserves make gains in market share at the expense of their rivals. Gains in the product market are more pronounced among firms with low exposure to predatory risk and financing frictions.",
author = "Gbenga Adamolekun and Edward Jones and Hao Li",
note = "Funding Information: We are grateful for comments received during seminar discussions from members of the Centre for Finance & Investment (CFI), Heriot-Watt University, Edinburgh, United Kingdom, especially Professor Rossini Haniffa, and Professor Mustafa Caglayan. Furthermore, we thank Professor Ian Hirst and Dr Daniel Santamaria for their feedback on this paper. Also, our gratitude goes to Shima Amin and other seminar participants of the INFINITI Conference on International Finance at the University of Glasgow. Our profound appreciation also goes to Arnt Verriest and other participants of the 7th Paris Financial Management Conference at the IPAG Business School for their comments on this paper. Publisher Copyright: {\textcopyright} 2022 The Authors. Managerial and Decision Economics published by John Wiley & Sons Ltd.",
year = "2023",
month = jan,
doi = "10.1002/mde.3705",
language = "English",
volume = "44",
pages = "641--662",
journal = "Managerial and Decision Economics",
issn = "0143-6570",
publisher = "John Wiley and Sons Ltd",
number = "1",
}