Product Price Risk and Liquidity Management: Evidence from the Electricity Industry
研究发现电力价格波动越大，企业现金持有越多，且生产灵活性低或难以对冲价格风险的企业现金增加更明显，表明运营灵活性和对冲是流动性管理的替代手段。
Product price risk is a potentially important factor for firms’ liquidity management. A natural place to evaluate the impact of this risk on liquidity management is the electricity industry, because producing firms face substantial price volatility in wholesale markets. Empirically, higher volatility of electricity prices leads to an increase in cash holdings, and this effect is robust to instrumenting for price risk using weather volatility. Cash increases more with price risk in firms using inflexible production technologies and those that cannot easily hedge electricity prices, indicating that operating flexibility and hedging are substitutes for liquidity management. This paper was accepted by Karl Diether, finance.