The Effect of Leverage, Growth Opportunity, Net Working Capital And Dividend Payment Towards Cash Holding Manufacturing Companies Listed On IDX Period 2018-2020

Abstract

The purpose of the research is to examine about the effect of leverage, growth opportunity, net working capital and dividend payment on cash holding in manufacture companies listed on the Indonesia Stock Exchange for the period 2018 - 2020. The research used 47 manufacture companies that were selected using purposive sampling method for a total of 141 data in three years. Eviews 12.0 used as a data processing program to assist the research process and the research also used panel data regression analysis. The result of the research shows that all independent variables have effects on cash holding simultaneously. The result show that net working capital and dividend payment have positive effects on cash holding, however leverage and growth opportunity have negative effects on cash holding. Thus, this study can be directly contributed to investors, company and further researchers about the specific view of the cash holding on manufacture company in Indonesia.

Determinants of Cash Holding of Non-Cyclicals Sector Companies Listed on Indonesia Stock Exchange

“…The same thing applies to the growth opportunity variable regarding cash holing, according to Maxentia et al (2022) and Anggrahini et al (2023) stated that growth opportunity has influence on cash holding. However, the results of this research are different from the results of research by Audrey et al (2023); Valent and Yanti (2023); and Hengsaputri and Bangun (2020). It appears that there are still differences of opinion on the influence of liquidity, net working capital and growth opportunity on cash holding in different places and times.…”

“…High net working capital indicates that the company has current assets that are greater than current liabilities. This is in line with research conducted by Audrey et al (2023); Anggrahini et al (2023); and He and Louw (2022) who stated that net working capital has a positive significant effect on cash holding. However, the results of this research are different from the research results of Valent and Yanti (2023), and Hanaputra and Nugroho (2021).…”

“…In addition, companies with enormous growth opportunities tend to maintain lower cash reserves because they rely more on short-term debt to support their investment initiatives so as not to reduce or increase the company's cash holdings. This aligns with research conducted by Audrey et al (2023); Valent and Yanti (2023); and Hengsaputri and Bangun (2020) which states that growth opportunity does not influence cash holding. However, the results of this research are different from the results of research by Maxentia et al (2022) and Anggrahini et al (2023), which states that growth opportunity has a positive significant effect on cash holding.…”

“…Likewise with working capital studies. Audrey et al (2023); Anggrahini et al (2023);and He and Louw (2022) argue that net working capital has a positive significant influence on cash holdings where this result is contrary to the study Hanaputra and Nugroho (2021) and Valent and Yanti (2023). The same thing applies to the growth opportunity variable regarding cash holing, according to Maxentia et al (2022) and Anggrahini et al (2023) stated that growth opportunity has influence on cash holding.…”