Corporate liquidity management: A conceptual framework and survey

Heitor Almeida, Murillo Campello, Igor Cunha, Michael S. Weisbach

Research output: Contribution to journalReview articlepeer-review

71 Citations (Scopus)


Ensuring that a firm has sufficient liquidity to finance valuable projects that occur in the future is at the heart of the practice of financial management. However, although discussion of these issues goes back at least to Keynes (1936), a substantial literature on the ways in which firms manage liquidity has developed only recently. We argue that many of the key issues in liquidity management can be understood through the lens of a framework in which firms face financial constraints and wish to ensure efficient investment in the future. We present such a model and use it to survey many of the empirical findings on liquidity management. In addition, we discuss agency-based theories of liquidity, the real effects of liquidity choices, and the impact of the 2008-2009 Financial Crisis on firms' liquidity management.

Original languageEnglish
Pages (from-to)135-162
Number of pages28
JournalAnnual Review of Financial Economics
Publication statusPublished - 1 Dec 2014


  • Cash
  • Financial constraints
  • Financial crisis
  • Liquidity


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