Determinants of Cash Holdings in Developed and Developing Countries

Abstract

This paper aims to find out the determinants of amount of cash holdings in developed and developing countries. One of the reason is because majority of studies that exist only focus on developed countries such as US or UK. Therefore, it is important to study cash holdings in the context of developing countries as well. Samples are drawn from DataStream Database using a sample period between 2009-2014 by including recent output with firm selection criterion based on data availability of firms (Al-Najjar, 2013), whereas financial firms with SIC codes 6000-6799 were not included as well as utility firms with SIC codes 4000-4999, resulting in total sample of 5402 observations from 23 countries. EViews was employed for the regression analysis with amount of cash holdings as the dependent variable. The results show that most of the hypotheses are not confirmed because of insignificant results and/or unexpected signs of coefficients. As the research about cash holdings in developing countries is not extensive yet, it is possible that there are differences to be found between developed and developing countries.

The Effect Of Dividend, Board Characteristics, Information Asymmetry Towards Cash Holding On Manufacturing Company

“…This result is contrary to the results of research by [9] which shows that board independence has a negative relationship and a significant effect on cash holding. The results of this study are in accordance with the results of a study conducted by [10] showing board independence has no influence on cash holding and research results from [11].…”

“…The results of this study contradict the results of [9] study which showed a negative relationship to cash holding and the results of research by [10] which said the board size had a significantly positive relationship to cash holding. The results of the research that are in accordance with the results of this study are the studies conducted by [11].…”

“…According to [9] the board size has a significant negative relationship to the cash holding, but the research was conducted on companies in China. However, according to the research results of [11] the board size has an insignificant influence and a negative relationship to the cash holding.…”

Board Financial Expertise and Corporate Cash Holdings: Moderating Role of Multiple Large Shareholders in Emerging Family Firms

“…As examined by recent literature, the board of directors is an essential component of corporate governance [41,73], particularly in substantial business enterprises [84]. e internal governance is ordinarily estimated by ownership structure, nonexecutive directors on board, effective audit, and so forth [85,86].…”

“…e vast body of literature on corporate board and firm's governance characterized board obligations into different roles [52,53,84,85]. ese roles are not fundamentally distinct, and each one is fortified with an expert financial presence on board.…”