Cash holdings and SME performance in Europe: the role of firm-specific and macroeconomic moderators

@article{Rocca2018CashHA,
  title={Cash holdings and SME performance in Europe: the role of firm-specific and macroeconomic moderators},
  author={M. La Rocca and Raffaele Staglian{\`o} and Tiziana La Rocca and Alfio Cariola and Ekaterina Skatova},
  journal={Small Business Economics},
  year={2018},
  pages={1-28}
}
For the first time, this paper examines the way in which cash holdings affect firm operating performance in a wide sample of European small and medium-sized enterprises (SMEs). Our results suggest that cash holdings have a positive effect on operating performance, supporting the relevance of precautionary savings motive for SMEs. Maintaining a buffer of money on hand, ready for use in any contingency, has a relevant positive effect that overcomes potential opportunistic problems. Moreover, we… CONTINUE READING

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