Do Firms' Cash Holdings Differ Between Asian Countries? Theory and Empirical Validation

Abstract

This work identifies the factors that explain firms cash holdings (Opler, Pinkowitz, Stulz, and Williamson, 1999). Empirical validation was calculated on two Asian countries: Chine and Japan. To measure of firms cash holdings, we use, alternatively, two measures: Cash ratio approximated as the ratio of cash and equivalents of cash to total assets, and Quick ratio calculated as cash and equivalents of cash to current liabilities. Our samples contain 119 firms from each country for a period of 8 years from 2006 to 2013. Descriptive statistics show that firms from Chine have higher debt and profitability ratios. However, firms in Japan are older than firms in Chine with a mean age of 38,357 years with a minimum of 4 years and a maximum of 121 years. the results report many differences in cash holdings policy between the two countries. Contrary to our hypothesis, firms in China that have higher capital structure ratios have more cash. We concluded to a difference in the effect of firm size and number of employees in the two countries. Older firms in Japan have more cash. Finally, we concluded to a negative and a statistically significant effect of growth opportunities for firms in Japan and China. Firm performance positively influence cash in the two countries.

The impact on people’s holding intention of bitcoin by their perceived risk and value

“…Accordingly, this article investigated the moderating effects of gender and age on the relationships mentioned above. Hatem (2017) explored the positive impact of age on cash holdings of the firms operating in Japan; nevertheless, a contrary effect was observed in China. Furnham and Okamura (1999) found that females manifested less likelihood of taking moral risks of money.…”