caa a22 4500 388047593 CHVBK 20180307125042.0 cr unu---uuuuu 161130e199809 xx s 000 0 eng 10.2307/2331099 doi S0022109000000971 pii (NATIONALLICENCE)cambridge-10.2307/2331099 The Determinants of Corporate Liquidity: Theory and Evidence [Elektronische Daten] We model the firm's decision to invest in liquid assets when external financing is costly. The optimal amount of liquidity is determined by a tradeoff between the low return earned on liquid assets and the benefit of minimizing the need for costly external financing. The model predicts that the optimal investment in liquidity is increasing in the cost of external financing, the variance of future cash flows, and the return on future investment opportunities, while it is decreasing in the return differential between the firm's physical assets and liquid assets. Empirical tests on a large panel of U.S. industrial firms support the model's predictions. Copyright © School of Business Administration, University of Washington 1998 Kim Chang-Soo Yonsei University, Wonju-City, South Korea Mauer David C. Southern Methodist University, Cox School of Business, 6212 Bishop Boulevard, P.O. Box 750333, Dallas, TX 75275-0333 Sherman Ann E. Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong. Journal of Financial and Quantitative Analysis Cambridge University Press 33/3(1998-09), 335-359 0022-1090 33:3<335 1998 33 JFQ https://doi.org/10.2307/2331099 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.2307/2331099 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Kim Chang-Soo Yonsei University, Wonju-City, South Korea NATIONALLICENCE 700 1- Mauer David C. Southern Methodist University, Cox School of Business, 6212 Bishop Boulevard, P.O. Box 750333, Dallas, TX 75275-0333 NATIONALLICENCE 700 1- Sherman Ann E. Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong NATIONALLICENCE 773 0- Journal of Financial and Quantitative Analysis Cambridge University Press 33/3(1998-09), 335-359 0022-1090 33:3<335 1998 33 JFQ CC0 http://creativecommons.org/publicdomain/zero/1.0 nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-cambridge