Categorical Financial Analyses on the Level of Corporate Cash Reserves for the Korean Chaebol Firms in the Post-Era of the Global Financial Crisis

Abstract

The primary objective of implementing the study was to further investigate any pronounced financial components affecting the level of cash retention for the Korean chaebol firms. The research was framed to test for two hypotheses on the cash savings with utilizing the chaebol firms during the post-era of the global financial turmoil (from 2009 to 2013). In the first hypothesis test, any significant explanatory variables relative to the cash holdings, were identified in each corresponding category of the conditional quantile regression (CQR) model, while multilogistic regression analysis was performed to discriminate relevant financial factors in each pair of classes consisting of the chaebol firms. Concerning the results, liquidity, agency costs, and cash conversion cycle were found to be statistically significant in the majority of classified categories in the former test and liquidy, firm size, and dividend yield, also showed discriminating powers in each pair of categorical for the firms in the latter test.■ keyword :|Cash Holdings|Chaebol Firms|Quantile Regression|Multilogistic Regression|Financial Determinant|

Principal Component Analysis on the Theory of Corporate Cash Holdings for Korean Chaebol Firms

“…With the aim to identify relevant theories applicable to the major motivations of corporate cash holdings, most of the explanatory variables tested in the previous studies such as [1], [2] and [6] were at first classified…”

“…For reference. the categorized groups among total sample firms had also been used in the previous literature such as in [6] to apply the conditional quantile regression analysis (CQR).…”

Financial Factors Influencing Corporate Cash Reserves of Firms in Chungcheong Province in the Korean Capital Markets

“…First, the present study is an extension of the previous literature such as [3] and [4], which dealt with identifying financially prominent factors affecting the level of corporate cash holdings in the domestic capital markets. One of the primary differences of the study from those in the previous literature is to focus on investigating the sample firms based in Chungcheong province which is one of the regional areas constituting the Korean capital markets, in comparison with the latter studies testing for relatively large size firms belonging to the Korean chaebols.…”