Multinational Conglomerates and the Financing Choices of U.S. Firms

U.S. corporations are holding record-high amounts of cash while at the same time their investment to cash fl�ow sensitivity, often considered a proxy of �financial constraints, is dwin- dling. Both these phenomena date back before the crisis. While different independent explanations for each of these two fi�ndings have been proposed, no systematic analysis has been undertaken on whether (and how) the two phenomena are related, and why they have prominently emerged after the mid-1990s. In this paper we show how the increasing organization of production across national borders of U.S. corporations can play a role in jointly explaining these two apparently inconsistent financing choices