TY  - JOUR
AU  - Almazan,Andres
AU  - Motta,Adolfo de
AU  - Titman,Sheridan
AU  - Uysal,Vahap
TI  - Financial Structure, Liquidity, and Firm Locations
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13660
PY  - 2007
Y2  - December 2007
UR  - http://www.nber.org/papers/w13660
L1  - http://www.nber.org/papers/w13660.pdf
N1  - Author contact info:
Andres Almazan
Finance Department
McCombs School of Business
University of Texas at Austin
Austin, TX 78712-1179
E-Mail: andres.almazan@mccombs.utexas.edu

Adolfo de Motta
McGill University
Bronfman Building, Rm 581
1001 Sherbrooke Street West
Montreal, Quebec, Canada
E-Mail: adolfo.demotta@mcgill.ca

Sheridan Titman
Finance Department
McCombs School of Business
University of Texas at Austin
Austin, TX 78712-1179
Tel: 512/232-2787
Fax: 512/471-5073
E-Mail: titman@mail.utexas.edu

Vahap Uysal
Michael F. Price College of Business
Division of Finance
University of Oklahoma
307 W. Brooks, Suite 252
Norman, Oklahoma 73019-4005
Tel: 405 325-5591
E-Mail: uysal@ou.edu
AB  - This paper investigates the relation between a firm's location and its corporate finance decisions. We develop a simple model where being located within an industry cluster increases opportunities to make acquisitions, and to facilitate those acquisitions, firms within clusters maintain more financial slack. Consistent with our model we find that firms that are located within industry clusters tend to make more acquisitions, and have lower debt ratios and larger cash balances than their industry peers located outside clusters. In addition, we document that firms in growing cities and technology centers also maintain more financial slack. Overall, these findings, which reveal systematic patterns between geography and corporate finance choices, suggest the importance of growth opportunities in firms' financial decisions.
ER  -