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Multinational cash management and conglomerate discounts in the euro zone

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  • von Eije, Henk
  • Westerman, Wim

Abstract

We discuss the impact of liberalisation, deregulation and the introduction of a single currency on cash management within multinationals in the euro zone. The developments in the euro zone reduce financial market imperfections in transferring cash and diminish the need for separate local cash holdings. This facilitates the centralisation of cash management and headquarters' financial control. Increased financial power of multinational headquarters, moreover, offers opportunities for disintermediation. By exploiting these options multinationals in the euro zone can start to reap additional benefits of internal financing and conglomerate discounts of euro zone multinationals may diminish.

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  • von Eije, Henk & Westerman, Wim, 2002. "Multinational cash management and conglomerate discounts in the euro zone," International Business Review, Elsevier, vol. 11(4), pages 453-464, August.
    • Handle: RePEc:eee:iburev:v:11:y:2002:i:4:p:453-464
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    Cited by:

    1. Ramírez, Andrés & Tadesse, Solomon, 2009. "Corporate cash holdings, uncertainty avoidance, and the multinationality of firms," International Business Review, Elsevier, vol. 18(4), pages 387-403, August.

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