Local financial development and cash holdings in Italian SMEs
研究了意大利地方金融发展（以银行网点密度衡量）对中小企业现金持有的影响，发现金融发展通过便利银行借贷减少了企业预防性现金需求，尤其对年轻和小型企业在危机时期作用显著。
In this article, we investigate the effect of local financial development on cash holdings of Italian small and medium-sized enterprises (SMEs). Consistent with the hypothesis that local financial development reduces the need to hold precautionary cash because it facilitates access to bank debt, we find that local financial development measured by the density of bank branches in Italian provinces has a negative effect on corporate cash holdings. This effect is driven by SMEs with bank debt. Furthermore, the negative effect of local financial development on cash holdings only exists for younger and smaller SMEs, which are more likely to benefit from increased local financial development. Our work highlights that local financial development is an important driver of policies on holding cash by SMEs and is particularly relevant during crisis periods, such as the recent COVID-19 crisis.