On the determinants of SME cash holdings: Evidence from Spain

  • García-Teruel P
  • Martínez-Solano P
  • 84


    Mendeley users who have this article in their library.
  • 48


    Citations of this article.


This work analyses the factors that might explain the level of cash holdings in a sample of 860 small and medium-sized firms from Spain during the period 1996-2001. The empirical results show that firms have a target cash level to which they attempt to converge. The level of this target is higher for firms with more growth opportunities and larger cash flows. In contrast, the target level for cash holdings falls when the use of bank debt and the presence of substitutes for cash increase. Moreover, when the interest rates in the economy increase firms reduce their cash holding.

Author-supplied keywords

  • Cash
  • Liquidity
  • SMEs

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free