Unemployment insurance and cash holdings of privately held firms around the world

Research Question/Issue This paper studies the relationship between country‐level unemployment insurance and cash holdings of privately held firms. When public unemployment insurance is weak, firms may provide alternative unemployment insurance by committing not to lay off workers in bad times. We hypothesize that one way firms can do so is by holding larger cash balances. Research Findings/Insights Using a large sample covering 388,940 private...