The effect of cash retention and investment on the operational performance of Brazilian exporting and domestic companies in periods of economic growth and recession
DOI:
https://doi.org/10.5007/2175-8069.2021.e73580Abstract
The objective of this paper is to verify what is the effect of cash retention and investment in fixed assets on the operational performance of Brazilian exporting and domestic companies listed in B3, in a period of economic growth and Brazilian economic recession, covering the period from 2005 to 2018. The findings show that, during the period of economic recession, Brazilian exporting companies with higher cash retention and higher investment in fixed assets presented superior operational performance than other companies that adopted different strategies of investment of resources. Still more internationalized exporting companies with higher cash retention and investment in fixed assets performed better than the less internationalized ones. As a major contribution, the research shows that exporting is not enough for superior operational performance, but that diversification must be accompanied by resource application strategies that provide better results, as recommended by the Resource-Based View Theory (VBR).
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