The impact of competition and time-to-finance on corporate cash holdings

Mark Raun Moritzen, Alexander Schandlbauer

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This paper empirically documents how the interaction between competition and time frictions in capital markets impacts firms' cash management decisions. Using the introduction of the U.S. Securities Offering Reform in 2005 as a quasi-natural experiment, we show that a shorter time-to-finance leads to a reduction in corporate cash holdings. This effect is significantly stronger for firms that are exposed to preemption risk. Furthermore, patents mitigate the risk of preemption and the effect of a reduction in time-to-finance on cash holdings is strongest for unconstrained firms.
Original languageEnglish
Article number101502
JournalJournal of Corporate Finance
Number of pages25
Publication statusPublished - Dec 2020


  • cash holdings
  • competition
  • capital market frictions
  • time-to-finance
  • real investment
  • Competition
  • Real investment
  • Capital market frictions
  • Cash holdings
  • Time-to-finance


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