دارایی های نقدی شرکت در صنعت حمل و نقل Corporate cash holdings in the shipping industry

1. Introduction Cash holdings and other liquid assets have always been important for the strategic decisions of shipping companies. For example, in May 2007, well before the outbreak of the global financial crisis, Navios Maritime Holdings Inc. purchased the Belgian maritime transport company Kleimar N.V. for $165.6 million in cash to get hold of Capesize and Panamax vessels used in the transportation of cargoes to China. More recently, Maersk Line acquired Hamburg Süd for €3.7 billion on a cash and debt-free basis in December 2016 to capture additional market share at times when poor conditions in the liner industry forced some rivals to underinvest. In May 2017, Scorpio Tankers and Navig8 Product Tankers announced their merger, which will create the world’s largest product tanker player. In a first step, Scorpio Tankers will acquire four tanker vessels from Navig8 for $42.2 million in cash, net of assumed debt. This cash, working as bridge financing, will form part of the balance sheet of the combined firm to signal financial strength.1 The extant literature identified several motives for corporations to hold cash, which can explain the use of cash in the above examples from the shipping industry. For example, by using cash to make payments firms can save on transaction costs associated with having to liquidate assets. Miller and Orr (1966) document that brokerage costs induce firms to hold more liquid assets. Myers and Majluf (1984) argue that in the presence of asymmetric information, raising external financing is more costly than using internal funds, which makes it optimal for firms to hold a certain level of cash to meet their investment requirements. Another motive for firms to reserve cash is to hedge the risk of future cash shortfalls, which is known as the precautionary motive for cash holdings. Opler et al. (1999) show that firms tend to hold more liquid assets if the average cash flow volatility of their industry is higher. Mikkelson and Partch (2003) document that firms that persistently hold large cash reserves do not underperform when compared with their peer firms. These studies suggest that firms use internally generated funds to hedge against future cash flow uncertainty and increase their cash holdings in response to increases in cash flow volatility. Supporting this hedging argument, Almeida et al. (2004) show that financially constrained firms save more cash during bad business cycle periods than their unconstrained peers. Similarly, Han and Qiu (2007) directly examine the link between a firm’s cash holdings, cash flow uncertainty, and financial constraints and find that financially constrained firms have a stronger tendency to increase cash holdings when experiencing an upturn in cash flow volatility.