Job creation and cash holdings in private firms: is there a link?

Dialogues économiques
MARCH 3, 2020
Contrary to popular belief, holding large amounts of cash does not encourage private companies to hire staff. In fact, the effect is quite the opposite. Economists Philippe Bacchetta, Kenza Benhima and Céline Poilly highlight the role of external ‘liquidity shocks’ to explain a surprising link between the two phenomena.
Contrairement à ce que l’on pourrait croire, la détention exorbitante de cash n’incite pas les entreprises à embaucher, bien au contraire ! Pendant la crise financière de 2007-2008 et la vague massive de licenciements qui s’ensuivit, les entreprises ont augmenté leur part de « cash » sur l’ensemble des titres qu’elles détiennent. Les économistes Philippe Bacchetta, Kenza Benhima et Céline Poilly mettent en lumière le rôle des chocs de liquidités externes pour expliquer cette relation inattendue.
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