scholarly journals Políticas de Cash Holdings: uma Abordagem Dinâmica das Empresas Brasileiras

2013 ◽  
Vol 11 (3) ◽  
pp. 343
Author(s):  
Fadwa Muhieddine Dahrouge ◽  
Richard Saito
Keyword(s):  
Negative Relationship ◽  
Cash Holdings ◽  
Adjustment Costs ◽  
Optimum Level ◽  
Bank Debt ◽  
Speed Of Adjustment ◽  
Fixed Assets ◽  
Main Determinants ◽  
Corporate Cash Holdings

This paper investigates how corporate cash holdings were adjusted over time for Brazilian companies during the crisis of 2008-2009. We adopt a dynamic model of corporate cash holdings to evaluate the main determinants for the speed of adjustment of cash holdings at the optimum level. We find evidence that: a) the adjustment costs of Brazilian companies are high implying a delay in reaching the optimum level of cash; b) the low speed adjustment to the optimum level is due to the limited availability of credit and the high cost of bank debt; c) during crisis, the changes in working capital are positively related to the level of cash holdings providing evidence that companies prefer finance to growth with liquidity; d) companies have looked for long-term financing to secure liquidity rather than investing on fixed assets, implying a negative relationship between investment and cash holding.

scholarly journals Determinants of corporate cash holdings: An empirical study of Chinese listed firms

2018 ◽  
Vol 15 (3) ◽  
pp. 57-65
Author(s):  
Rizwan Ahmed ◽  
Wu Qi ◽  
Subhan Ullah ◽  
Danson Kimani
Keyword(s):  
Corporate Governance ◽  
Cash Flow ◽  
Fixed Effects ◽  
Negative Relationship ◽  
Cash Holdings ◽  
Developed Countries ◽  
Bank Debt ◽  
Chinese Context ◽  
The Developed Countries ◽  
Corporate Cash Holdings

This study explores the determinants of corporate cash holdings in the Chinese context. As one of the largest developing countries in the world, China offers an interesting opportunity to explore the role of corporate governance, and ownership structure in explaining corporate cash holdings. Owing to the unique economic problems in the developing and emerging economies, this study aims to investigate whether the research findings on developed countries could be generalized globally. Applying fixed-effects estimations on a sample of 115 Chinese firms listed between 2012 and 2016, we find that the level of corporate cash holdings has a significantly negative relationship with leverage, bank debt, non-cash liquid assets and managerial ownership. In particular, cash flow volatility, investment opportunity and dividend have a significantly positive relationship with cash holdings levels. These findings are consistent with the majority of the existing studies carried out in the Western context. We also find that firm size, cash flow, board independence and ownership concentration have a significant influence on the level of corporate cash holdings. Our study contributes to the finance literature and we offer new insights into the relationship between corporate governance and corporate cash holdings in the Chinese context. Some of the findings on the developed countries could be generalized to a wider context. Further, the unique relationship between corporate governance and cash holdings in the Chinese context provides empirical insights for further research.

The Speed of Adjustment of Corporate Cash Holdings

2018 ◽  
Vol 52 (3) ◽  
pp. 139-151 ◽  
Author(s):  
K T Vigneswara Rao ◽  
Keyur Thaker*
Keyword(s):  
Cash Holdings ◽  
Speed Of Adjustment ◽  
Corporate Cash Holdings

How do Spanish unlisted family firms rebalance their capital structures?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zélia Serrasqueiro ◽  
Fernanda Matias ◽  
Julio Diéguez-Soto
Keyword(s):  
Capital Structure ◽  
Transaction Costs ◽  
Family Firms ◽  
Adjustment Costs ◽  
Dynamic Panel Data ◽  
Future Research ◽  
Short Term ◽  
Content Type ◽  
Speed Of Adjustment

PurposeThis paper seeks to analyze the family firm's capital structure decisions, focusing on the speed of adjustment (SOA) as well as on the effect of distance from the target capital structure on the SOA towards target short-term and long-term debt ratios in unlisted small and medium-sized family firms.Design/methodology/approachMethodologically, we use dynamic panel data estimators to estimate the effects of distance on the speeds of adjustment towards those targets. Data for the period 2006–2014 were collected for two research sub-samples: one sub-sample with 398 family firms; the other sub-sample contains 217 non-family firms.FindingsThe results show that the deviation from the target debt ratios impacts negatively on the speeds of adjustment towards target short-term and long-term debt ratios in unlisted family firms. These results suggest that family firms, deviating from target debt ratios, face deviation costs, i.e. insolvency costs, inferior to the adjustment costs, i.e. transaction costs. Therefore, family firms stay away from the target debt ratios for a long time than do non-family firms.Research limitations/implicationsThe research sample comprises a low number of family firms, therefore for future research we suggest increasing the size of the sample of family firms to get a deeper understanding of family firms' SOA towards capital structure. Additionally, we suggest the analysis of other potential determinants of the speed of adjustment towards target capital structure.Practical implicationsThe results obtained suggest that the distance from the target short-term and long-term debt ratios can be avoided if these firms do not depend almost exclusively on internal finance to adjust towards target capital structure. Moreover, for policymakers, we suggest the creation/promotion of alternative external finance sources, allowing reduced transaction costs that contribute to a faster adjustment of small family firms towards target capital structure.Originality/valueThe most previous research focusing on capital structure decisions have focused on listed family firms. To fill this gap, this study examines the speed of adjustment towards target debt ratios in the context of unlisted family firms. Moreover, transaction costs are a function of debt maturity, therefore this study examines separately the speeds of adjustment towards target short-term and long-term debt ratios. This paper shows that the adjustment costs (i.e. transaction costs) could hold back family firms from rebalancing its capital structure.

Does corporate social responsibility transparency mitigate corporate cash holdings?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohammad Hendijani Zadeh ◽  
Michel Magnan ◽  
Denis Cormier ◽  
Ahmad Hammami
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Lower Cost ◽  
Value Relevance ◽  
Negative Relationship ◽  
Cash Holdings ◽  
Ordinary Least Squares ◽  
Content Type ◽  
Corporate Social ◽  
Corporate Cash Holdings

PurposeThis article aims to explore whether a firm's corporate social responsibility (CSR) transparency alleviates a firm's cash holdings.Design/methodology/approachCSR transparency ratings encompass both the quantity and the quality of CSR practices, as validated by Bloomberg. While based upon firm-specific disclosure, transparency ratings impound additional information gathered independently by Bloomberg and thus bridge the gap between CSR disclosure and CSR performance. The authors use ordinary least squares estimators, and the authors concentrate on a panel of S&P 500 index companies over the period of 2012–2018 to examine the effect of CSR transparency on corporate cash holdings.FindingsThe authors document that a higher level of CSR transparency induces a lower level of corporate cash holdings. Additional results imply that this negative relationship is more pronounced for firms suffering from high information asymmetry, with low financial reporting quality and for those with weak governance. Further analyses document that higher CSR transparency can help firms to enjoy lower cost of debt and to be less financially constrained, enabling high CSR transparent firms to obtain external financing more easily and at a lower cost, thus lowering the need to hoard cash. Ultimately, the study findings suggest that CSR transparency increases the market value relevance of an additional dollar in cash holdings.Originality/valueThe authors contribute to both research streams of CSR and corporate cash holdings as they provide evidence about the influence of CSR transparency as a monitoring and insurance-like mechanism on corporate cash holdings.

The use of meta-analysis in research on corporate cash holdings speed of adjustment

2019 ◽  
Vol 64 (5) ◽  
pp. 48-73
Author(s):  
Fryderyk Mirota
Keyword(s):  
Selection Bias ◽  
Bayesian Model Averaging ◽  
Meta Analysis ◽  
Estimation Method ◽  
Cash Holdings ◽  
Model Averaging ◽  
Model Specification ◽  
Data Set ◽  
Speed Of Adjustment ◽  
Corporate Cash Holdings

In empirical research significant diversity of corporate cash holdings speed of adjustment (SOA) estimates can be observed. It is possible that some of the results are affected by publication selection bias. Articles whose results are clearly in line with economic theories may be preferred by authors and reviewers and, consequently, conclusions from this area can be published more frequently. The aim of this article is to verify whether there is a publication selection bias with respect to studies related to corporate cash holdings adjustments and to investigate the sources of heterogeneity in cash holdings SOA estimates. The statistical method used in the study was meta-analysis, which allows a combined analysis of the results from independent research. Meta-analysis enables to verify the occurrence of the publication selection bias and to explain the heterogeneity of the results presented in articles. The study was based on data collected asa result of a review of the literature published between 2003 and 2017. On the basis of information on 402 estimates from 58 different studies it has been shown that the publication selection bias does not occur. The Bayesian Model Averaging was used for modelling. It was identified that the characteristics associated with the data set used in the study, model specification and the estimation method significantly affect the hetero-geneity of corporate cash holdings SOA estimates. This diversity is determined, among others, by the choice of estimation method, length of the period covered by the analysis and characteristics of the market environment of the concerned entities.

scholarly journals Corporate Cash Holdings and National Culture: Evidence from the Middle East and North Africa Region

2021 ◽  
Vol 14 (10) ◽  
pp. 475
Author(s):  
Sherif El-Halaby ◽  
Hosam Abdelrasheed ◽  
Khaled Hussainey
Keyword(s):  
Middle East ◽  
North Africa ◽  
Robustness Analysis ◽  
Cash Holdings ◽  
Cultural Dimensions ◽  
Rate System ◽  
Exchange Rate System ◽  
The Impact ◽  
Corporate Cash Holdings

This paper investigates to what extent cultural dimensions, based on Hofstede’s model, can clarify differences in cash holding levels. The sample includes 395 banks across 19 countries in the Middle East and North Africa region over a period of 16 years (1999–2014). The findings indicate that when uncertainty avoidance and masculinity decrease, cash holdings increase, whereas when power distance, long-term orientation, and individualism increase, the cash holdings increase correspondingly. Based on robustness analysis, the results remain unaffected even after controlling corporate and macroeconomic characteristics related to inflation, corruption, and the exchange rate system. Further analysis shows insignificant differences between Islamic and non-Islamic banks regarding the influence of culture over cash holdings. This study contributes to the literature regarding the impact of culture on corporate cash holdings based on a unique and different context, through examining this relationship in financial institutions located in the Middle East and North Africa region.

Long-Term Effects of a Financial Crisis: Evidence from Cash Holdings of East Asian Firms

2012 ◽  
Vol 47 (3) ◽  
pp. 617-641 ◽  
Author(s):  
Kyojik (Roy) Song ◽  
Youngjoo Lee
Keyword(s):  
Financial Crisis ◽  
East Asian ◽  
Cash Holdings ◽  
Firm Characteristics ◽  
Long Term Effects ◽  
Long Term Effect ◽  
Increased Sensitivity ◽  
Cash Flow Volatility ◽  
Corporate Cash Holdings

AbstractWe investigate the long-term effect of the Asian financial crisis on corporate cash holdings in 8 East Asian countries. The Asian firms build up cash holdings by decreasing investment activities after the crisis. We find that the increase in cash holdings is not explained by changes in firm characteristics but by changes in the firms’ demand function for cash, which indicates that the crisis has systematically changed the firms’ cash-holding policies. Specifically, the firms’ increased sensitivity to cash flow volatility is one of the main factors explaining the higher level of their cash holdings in the postcrisis period.

ANALISIS VERTIKAL DAN HORIZONTAL TERHADAP LAPORAN KEUANGAN PT PERKEBUNAN NUSANTARA III (PESERO) MEDAN

2017 ◽  
pp. 1-15
Author(s):  
Anitha Paulina Tinambunan
Keyword(s):  
Palm Kernel ◽  
Third Party ◽  
Financial Ratios ◽  
Net Income ◽  
Bank Debt ◽  
Short Term ◽  
Fixed Assets ◽  
Deferred Tax Liabilities ◽  
Deferred Tax

This study aims to see the development of assets, profit / loss and observe financial ratios as projected financial performance of PT Perkebunan Nusantara III (PTPN III) Medan for the last 3 years ie the period of 2010 until 2012. From the results of vertical analysis known factors Causing the fluctuation of PTPN III financial ratios are: a) Liquidity increases due to the decrease in short-term liabilities; B) Solvency increases as a result of the increase in total debt; C) The creditability of accounts receivable collectability has improved; D) The profitability of a company decreases due to lower net income, increased assets and equity; E) Declining profitability is caused by the global economic crisis. While the results of comparison analysis are: 1) Current assets increased in 2011 and decreased in 2012 resulting from a reduction in cash, cash equivalent of third party receivables; 2) Fixed assets due to increased ownership of facilities / infrastructure and buildings; 3) Short-term debt increased in 2011 but decreased in 2012 due to decreased contractor debt, tax debt and bank debt; 4) Long-term debt increased due to increased deferred employee benefits and deferred tax liabilities; 5) Increased equity caused by increased issued and paid-up capital of the company; 6) Reduced net sales of palm oil, rubber and palm kernel and its derivatives due to falling selling prices; 7) Net income increased in 2011 but in 2012 is reduced and far from the planned company.

scholarly journals Why Has the Value of Cash Increased Over Time?

2018 ◽  
Vol 53 (2) ◽  
pp. 749-787 ◽  
Author(s):  
Thomas W. Bates ◽  
Ching-Hung Chang ◽  
Jianxin Daniel Chi
Keyword(s):  
Capital Market ◽  
Market Competition ◽  
Cash Holdings ◽  
Product Market Competition ◽  
Speed Of Adjustment ◽  
Firm Diversification ◽  
Investment Opportunity Set ◽  
Value Of Cash ◽  
Cash Flow Volatility ◽  
Corporate Cash Holdings

The value of corporate cash holdings has increased significantly in recent decades. On average, $1 of cash is valued at $0.61 in the 1980s, $1.04 in the 1990s, and $1.12 in the 2000s. This increase is predominantly driven by the investment opportunity set and cash-flow volatility, as well as secular trends in product market competition, credit market risk, and within-firm diversification. We document a secular decrease in the speed of adjustment (SOA) in cash holdings, particularly for financially constrained firms with cash deficits, suggesting that capital market frictions can account for the trend in the value of cash holdings.

Local financial development and cash holdings in Italian SMEs

2021 ◽  
pp. 026624262110115
Author(s):  
Francesco Fasano ◽  
Marc Deloof
Keyword(s):  
Financial Development ◽  
Cash Holdings ◽  
Bank Debt ◽  
Bank Branches ◽  
Negative Effect ◽  
Italian Provinces ◽  
Corporate Cash Holdings

In this article, we investigate the effect of local financial development on cash holdings of Italian small and medium-sized enterprises (SMEs). Consistent with the hypothesis that local financial development reduces the need to hold precautionary cash because it facilitates access to bank debt, we find that local financial development measured by the density of bank branches in Italian provinces has a negative effect on corporate cash holdings. This effect is driven by SMEs with bank debt. Furthermore, the negative effect of local financial development on cash holdings only exists for younger and smaller SMEs, which are more likely to benefit from increased local financial development. Our work highlights that local financial development is an important driver of policies on holding cash by SMEs and is particularly relevant during crisis periods, such as the recent COVID-19 crisis.

Sign in / Sign up

Export Citation Format

Share Document