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Financial Structure, Liquidity, and Firm Locations / Andres Almazan, Adolfo de Motta, Sheridan Titman, Vahap Uysal.
- Format:
- Book
- Author/Creator:
- Almazan, Andres.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w13660.
- NBER working paper series no. w13660
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2007.
- Summary:
- This paper investigates the relation between a firm's location and its corporate finance decisions. We develop a simple model where being located within an industry cluster increases opportunities to make acquisitions, and to facilitate those acquisitions, firms within clusters maintain more financial slack. Consistent with our model we find that firms that are located within industry clusters tend to make more acquisitions, and have lower debt ratios and larger cash balances than their industry peers located outside clusters. In addition, we document that firms in growing cities and technology centers also maintain more financial slack. Overall, these findings, which reveal systematic patterns between geography and corporate finance choices, suggest the importance of growth opportunities in firms' financial decisions.
- Notes:
- Print version record
- December 2007.
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