Local long-term institutions, growth and cash holdings

We provide empirical evidence that support both ‘outcome’ and ‘substitute’ models of agency theories related to cash holding. Local long-term institutional investors are associated with lower excess cash in firms with less growth and easier access to external financing, and with higher excess cash in firms with higher growth in our US sample.This is an Accepted Manuscript of an article published by Taylor & Francis in Applied Economics Letters on 8 Jan 2014, available online: