Essays in cash holdings

Cruz, Alethéia Ferreira da

doi:10.26512/2015.12.t.19705

Cited by 4 publications

(7 citation statements)

References 218 publications

(806 reference statements)

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“…The results of this study are also consistent with the results of a research in various countries, such as USA, Taiwan, Malaysia, Australia, Sweden, Pakistan. The results of the research conducted by these researchers indicate that the company's cash holding is positively related to the company's value in various sizes or proxies (Cruz, 2015).…”

Section: Resultsmentioning

confidence: 97%

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The Effect of Optimal Cash and Deviation from Target Cash on the Firm Value: Empirical Study in Indonesian Firms

Hanafi²,

Lantara³

2019

JDM

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The aim of this paper is to examine the effect of cash, optimal cash holding, deviation from target cash (the target adjustment model) on the firm value. This research uses a sample of Indonesian publicly traded firms for the period 2001-2017 (3,349 observation). This paper uses a dynamic panel fixed effects model to estimate optimal cash holdings. Hypothesis testing uses GLS fixed effect and interaction effect uses regression moderated analysis. Research finds that: first, cash, optimal cash, and deviation from target cash have an effect on the firm value. Second, corporate governance moderates the effect of cash, optimal cash, and deviation from target cash on the firm value. Third, investment positively moderates the effect of cash on the firm value. Investment negatively moderates the effect of optimal cash, deviation from target cash on the firm value. Debt negatively moderates the effect of cash, optimal cash on the firm value. Debt positively moderates the effect of deviation from target cash on the firm value. AbstrakTujuan penelitian ini menguji pengaruh kas, kas optimal perusahaan, dan deviasi dari kas target (model penyesuaian ke kas target) pada nilai perusahan. Riset menggunakan sampel perusahaan yang sudah go public selama perioda 2001-2017 (3.349 observasi). Penelitian menggunakan model panel dinamis fixed effects untuk mengestimasi kas optimal. Pengujian hipotesis menggunakan regresi GLS fixed effect, dan efek interaksi menggunakan model regresi berjenjang. Temuan penelitian menunjukkan bahwa: Pertama, kas, kas optimal, deviasi dari kas target berpengaruh pada nilai perusahaan. Kedua, interaksi tata kelola perusahaan terhadap pengaruh kas, kas optimal, dan deviasi dari kas target pada nilai perusahaan menghasilkan temuan yang beragam. Ketiga, investasi memperlemah pengaruh kas pada nilai perusahaan. Investasi memperkuat pengaruh kas optimal, dan deviasi dari kas target pada nilai perusahaan. Utang memperlemah pengaruh kas, dan kas optimal pada nilai perusahaan. Utang memperkuat pengaruh deviasi dari kas target pada nilai perusahaan.

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Section: Resultsmentioning

confidence: 97%

“…Companies in Indonesia have a mean of cash very low compared to countries in ASEAN (1994ASEAN ( -2013. Mean of cash Indonesian company are recorded at 5.8% -7.00%, Singapore 14% -20%, Philipines 14% -32%, Malaysia 7% -17%, and Thailand 8% -14% (Cruz, 2015).…”

Section: Introductionmentioning

confidence: 99%

The Effect of Optimal Cash and Deviation from Target Cash on the Firm Value: Empirical Study in Indonesian Firms

Hanafi²,

Lantara³

2019

JDM

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“…Then, we calculated the idiosyncratic risk variable (IRISK) as the root mean squared error of the regression (Cheung, 2016). Once we had estimated the idiosyncratic risk variable, we built a model similar to the model used by Cruz (2015) to examine the relationship between cash holdings and idiosyncratic risk (IRISK). In this model [equation ( 2)], our dependent variable was cash holdings (CH) and the main independent variable was the idiosyncratic risk (IRISK).…”

Section: Cash Holdings and Idiosyncratic Riskmentioning

confidence: 99%

Relationship between cash holdings and expected equity returns: evidence from Pacific alliance countries

Garavito

Chión

2021

JEFAS

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Purpose This paper aims to examine the relationship between cash holdings (CH) and expected equity return in a sample of firms of Pacific alliance countries. Design/methodology/approach This paper constructed a panel of Pacific alliance firms for the period ranging from 2010 to 2016. This paper estimated different specification models using multivariate regression, and the statistical technique used to validate the hypothesis was panel data. Findings Results showed that there is a positive relationship between CH and expected equity return (r). The relationship between CH and systematic risk (ß) was estimated and this paper found a positive and statistically significant association. Findings suggest that corporate liquidity contains underlying information that contributes to explain the expected equity return, which, if ignored, can produce quite misleading results. Originality/value The results of this study have both academic and practical implications. First, the findings of the research contribute to a better understanding of the asset pricing models in emerging countries. On the other hand, the results obtained in this study can serve shareholders to make better estimations of the expected equity return, so investors can improve the risk-return trade-off due to the model allow a better estimation of the risk-return relation.

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“…Introduction Cash holdings decision must be taken by managers to maintain operating activities of companies. As a matter of fact, Indonesian companies have lower cash flow than other fellow Southeast Asian countries, referring to a typicality of companies in developing countries which have lower cash ratio than those of developed countries (Da Cruz, 2015;Chen et al, 2015). In addition, the cash holding ratio (cash + short term investment of total asset) of non-financial public companies in Indonesia from 2000 to 2011 ranges from 9.8-13.1 percent (Hendrawati, 2015;Da Cruz, 2015).…”

Section: Abstraksimentioning

confidence: 99%

“…As a matter of fact, Indonesian companies have lower cash flow than other fellow Southeast Asian countries, referring to a typicality of companies in developing countries which have lower cash ratio than those of developed countries (Da Cruz, 2015;Chen et al, 2015). In addition, the cash holding ratio (cash + short term investment of total asset) of non-financial public companies in Indonesia from 2000 to 2011 ranges from 9.8-13.1 percent (Hendrawati, 2015;Da Cruz, 2015). The upward trend of cash holding in Indonesia and other countries resonates motivational theory of holding cash or Keynesian (Opler et al, 1999;Chang, Deng, & Wang, 2015;Shipe, 2015;Orlova & Rao, 2018).…”

Section: Abstraksimentioning

confidence: 99%

The optimal cash holdings speed of adjustment and firm value: An empirical study in Indonesia

Cahyono

Hanafi

Setiyono

2019

Jurnal Keuangan Dan Perbankan

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Essays in cash holdings

Cited by 4 publications

References 218 publications

The Effect of Optimal Cash and Deviation from Target Cash on the Firm Value: Empirical Study in Indonesian Firms

The Effect of Optimal Cash and Deviation from Target Cash on the Firm Value: Empirical Study in Indonesian Firms

Relationship between cash holdings and expected equity returns: evidence from Pacific alliance countries

The optimal cash holdings speed of adjustment and firm value: An empirical study in Indonesia

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