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Title: The Savings of Corporate Giants

Author(s): Olivier Darmouni and Lira Mota

Publication Date: April 2022

Keyword(s): corporate bonds, corporate cash, Liquidity management, repatriation tax and Superstar Firms

Programme Area(s): Financial Economics

Abstract: We construct a novel panel dataset to provide new evidence on how the largest nonfinancial firms manage their financial assets. Our granular data shows that, over the past decade, bond portfolios have grown to be at least as large as cash-like instruments, driven by the meteoric rise of corporate bond holdings. To shed light on the drivers of this growth, we conduct a pair of event studies around the 2017 tax reform and the 2020 liquidity crisis. Our new data suggests that the financial portfolios of corporate giants are primarily driven by cross-border tax incentives rather than liquidity motives.

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Bibliographic Reference

Darmouni, O and Mota, L. 2022. 'The Savings of Corporate Giants'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=17192