Corporate cash holdings and financial crisis: evidence from the emerging market of Greece

2020 ◽  
Vol 12 (2) ◽  
pp. 186
Author(s):  
Efstathios Magerakis
Keyword(s):  
Financial Crisis ◽  
Emerging Market ◽  
Cash Holdings ◽  
Corporate Cash Holdings ◽  
Of Greece

Foreign ownership, state ownership and cash holdings under the global financial crisis: evidence from the emerging market of Vietnam

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Quynh Nga Nguyen Thi ◽  
Quoc Trung Tran ◽  
Hong Phat Doan
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Emerging Market ◽  
Cash Holdings ◽  
Foreign Ownership ◽  
State Ownership ◽  
Exogenous Shock ◽  
Content Type ◽  
The Global Financial Crisis ◽  
Corporate Cash Holdings

PurposeThis paper investigates how the global financial crisis changes the effects of state ownership and foreign ownership on corporate cash holdings in an emerging market.Design/methodology/approachWe employ an interactive term between state ownership (foreign ownership) and a crisis dummy to analyze how the global financial crisis determines the effect of state ownership (foreign ownership) on corporate cash holdings.FindingsWith a research sample including 5,493 observations from 621 listed firms over the period 2007–2017, we find that state ownership (foreign ownership) is negatively (positively) related to corporate cash holdings and the effect of state ownership (foreign ownership) is stronger (weaker) during the crisis period. Moreover, the increase in the effect of state ownership is larger in financially unconstrained firms.Originality/valuePrior research shows that the effects of state ownership and foreign ownership on corporate cash holdings in emerging markets are still debatable. This paper extends this line of research by investigating how the global financial crisis – an exogenous shock – changes these effects.

Corporate cash holdings and firm life cycle: evidence from China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ajid Ur Rehman ◽  
Tanveer Ahmad ◽  
Shahzad Hussain ◽  
Shoaib Hassan
Keyword(s):  
Life Cycle ◽  
Growth Stage ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Cash Holdings ◽  
External Financing ◽  
Strategic Choices ◽  
Content Type ◽  
Firm Life Cycle ◽  
Corporate Cash Holdings

Purpose The purpose of this paper is to investigate how corporate cash holdings changes across firm life cycle and how firms undergo heterogeneous dynamic cash adjustment as they advance from one stage to the next stage. Design/methodology/approach This study uses an extensive data set of 2,994 Chinese A-listed firms. The authors use generalized method of moments (GMM) and Fisher Panel unit root testing to investigate the targeting behavior of Chinese firms. Findings The uni-variate investigation reveals that firms in the growth stage exhibits the highest cash levels and firms in the decline stage report the lowest cash levels. As growth firms have high investment needs, they may require raising external capital to meet investment needs. To avoid the costly external financing, firms in growth stage tend to hold more cash. The GMM estimation reveals that along all the phases of firm life cycle there are evidences of trade-off behavior of corporate cash holdings. The authors report that adjustment rate increases as firms enters into the growth stage. Practical implications The findings provide both theoretical and practical insight to align cash policies with the available strategic choices along firm life cycle in an emerging market characterized by market imperfections. Originality/value The study is unique from the context that it is applying robust methodology to one of rarely investigated area in corporate cash policy. The peculiar Chinese study setting characterized by higher information asymmetry, high cost of external financing and heterogeneous access to financing sources provide theoretical and empirical underpinnings to investigate and gain insight about how corporate cash policy can be aligned with strategic choices available across different stages of life cycle.

scholarly journals The Determinants of Corporate Cash Holdings: The Case of a Small Emerging Market

2016 ◽  
Vol 8 (1) ◽  
pp. 143
Author(s):  
Ghada Tayem
Keyword(s):  
Cash Flow ◽  
Emerging Market ◽  
Cash Holdings ◽  
Estimation Methods ◽  
Dynamic Effects ◽  
Growth Opportunities ◽  
Trade Off ◽  
Cash Flow Volatility ◽  
Cash Reserves ◽  
Corporate Cash Holdings

This study investigates the factors influencing the level of corporate cash holdings in the context of Jordan, a small emerging market characterized by large market frictions. This article employs the framework of the trade off, financing hierarchy, and managerial discretion theories to predict determinants of cash reserves. Then it examines these predictions using a sample of listed nonfinancial Jordanian firms over the period 2005-2013 using alternative estimation methods. Consistent with the trade-off theory, the results show that firm size and cash substitutes have negative and significant impact on cash holdings while growth opportunities and cash flow volatility have positive and significant impact. In addition, and consistent with the financing hierarchy view, the results show that cash flow and growth opportunities have positive and significant impact on cash holdings. Also, the study documents that leverage is negatively related to cash holdings while squared leverage is positively related to cash reserves. Finally, the results indicate that there are significant dynamic effects in determining cash holding targets.

scholarly journals The Determinants of Corporate Cash Holdings: Do Firm Characteristics and Industry Matter?

2018 ◽  
pp. 866-877
Author(s):  
Jing-Hui Kwan ◽  
Wee-Yeap Lau
Keyword(s):  
Emerging Market ◽  
Cash Holdings ◽  
Order Theory ◽  
Firm Characteristics ◽  
Pecking Order Theory ◽  
Sectoral Differences ◽  
Dynamic Panel Regression ◽  
Hospitality Firms ◽  
The Difference ◽  
Corporate Cash Holdings

We join a recent surge of corporate cash literature by using a sample of hospitality firms to gain a new understanding of corporate cash holdings. Existing literature predominantly refers to US-listed firms and focus on either hotels or restaurants and not the hospitality industry as a whole. Therefore, we provide a comparative study of cash holdings behaviour between hospitality and non-hospitality firms in an emerging market context. Using a sample of public listed hospitality firms in Malaysia firms from 2002 to 2013, dynamic panel regression techniques are used to study the relationships between firm characteristics and cash levels. Also, the non-parametric Wilcoxon-Mann-Whitney test was carried out to examine the time and sectoral differences in cash holdings. The results reveal that firm characteristics do matter in hospitality firms. We also show that industry representation drives the difference in cash holdings between hospitality and non-hospitality firms. We find that firm size, capital expenditures, and liquid assets substitutes are negatively related to cash level. The results support trade-off theory and the pecking order theory. This study incrementally explains the cash holdings behaviour of hospitality firms in emerging market, such as Malaysia. This paper points to an avenue of investigation for future cash holdings research to include firm characteristics and industry as part of the cash holdings determinants.

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