The 4 reference contexts in paper Christopher F. Baum, Mustafa Caglayan, Neslihan Ozkan, Oleksandr Talavera (2002) “The Impact of Macroeconomic Uncertainty on Non-Financial Firms' Demand for Liquidity” / RePEc:boc:bocoec:552

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    We were extremely pleased with our ability to achieve our revenue target for the fourth quarter while reducing channel inventory to a normal level... Continued strong asset management enabled us to maintain a solid balance sheet with over$4.3 billion in cash...”1
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    Kester (1986),
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    studying a sample of 452 US firms in 1983, reported that their average ratio of cash plus marketable securities to total assets is 8.6%; later Kim et al. (1998) reported an average of 8.1% for a sample of 915 US industrial firms over 1975–1994.
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    Continued strong asset management enabled us to maintain a solid balance sheet with over$4.3 billion in cash...”1 Kester (1986), studying a sample of 452 US firms in 1983, reported that their average ratio of cash plus marketable securities to total assets is 8.6%; later Kim et al. (1998) reported an average of 8.1% for a sample of 915 US industrial firms over 1975–1994.
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    Harford (1999)
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    indicated that the largest 25 percent of US nonfinancial corporations held an average of eight percent of their assets in cash reserves, citing that “cash represents 20 percent or more of the equity values of many well–known companies, such as IBM and Chrysler” (1999, p. 1971).
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    a firm will accumulate cash to meet unanticipated contingencies that may arise. 10Some authors have also suggested that “excess liquidity” may reflect a speculative motive, allowing firms to take advantage of profitable future investment opportunities. If firms face higher costs of external finance, positive “excess liquidity” may also reflect this motive (Kim, Mauer and Sherman (1998, p. 336);
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    Harford (1999,
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    p. 1969)). 8 ings to minimize the expected costs of cash management, implies that the manager will alter her cash holdings in anticipation of variations in macroeconomic shocks.11Initially, we assume that the firm’s cash flow is uniformly distributed, while the upper and lower bound of the distribution are known to the manager and are identical across all firms.
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    Furthermore, one would expect that their access to external finance may be limited, requiring them to behave more cautiously, particularly in times of higher macroeconomic uncertainty. These results are broadly in line with the previous literature: e.g.,
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    Harford (1999),
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    who finds a positive relation between industry–level market–to–book (MB) ratios and firms’ cash–to–asset ratios. He states that MB ratios are proxies for information asymmetry, with high values observed in firms which derive much of their market value from firm growth opportunities and intangibles (p. 1973).
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