The Dynamic Speed of Cash-Holding Adjustment in a Transition Economy: A New Approach and Evidence

Chang, Liang; Deng, Kebin; Wang, Xuan

doi:10.1080/1540496x.2016.1110460

Cited by 6 publications

(11 citation statements)

References 8 publications

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“…Data have heterogeneity firms and long-time observation. The estimator of dynamic panel data has two essential advantages: controlling for potential endogeneity problems and addressing the dynamic nature of cash holding (Chang et al, 2015). Table 1 shows that cash & cash equivalent/total assets in the sample firms have an average of 0.0889, which means that the average cash of the firm is 8.89% of the total assets.…”

Section: Methodsmentioning

confidence: 99%

“…The estimated speed of adjustment to optimal cash is 9.888%. The findings indicate that the speed of adjustment to optimal cash in Indonesia is quite low when compared to other countries, such as China, Belgium that ranges from 20% to 40% (Chang et al, 2015;Jiang & Lie, 2015;Anderson & Hamadi, 2016). The dynamic estimation model used fixed-effect cross-section specifications shows in Table 2.…”

Section: Methodsmentioning

confidence: 99%

“…Such conditions will have an impact on the reluctance of the board of commissioners, making them uncritical and inactive in exercising control according to the role and task of monitoring. The estimator of dynamic panel data has two essential advantages: controlling for potential endogeneity problems and addressing the dynamic nature of cash holding (Chang et al, 2015;. The test support used the dynamic panel for estimates of optimal cash holding.…”

Section: Source: Data Processingmentioning

confidence: 99%

See 2 more Smart Citations

Does Ownership Structure Pay Attention to The Corporate Cash Policy? Evidence in Indonesia Firms

Hc¹,

Hanafi²

2019

Etikonomi

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Cash and its use will connect to many things, such as the performance of corporate governance. This empirical research examines the interaction effect of insider ownership, institutional ownership, and independent board toward the influence of cash policy on the firm value. This research using agency theory framework, corporate governance using Indonesia listed firms’ samples over 2001-2017 (197 firms, 3349 observation). Fixed effect dynamic panel regression and regression-moderated analysis used in this research. We show that these results suggest that the insider ownership, institutional ownership, and independent board strengthen the influence of the corporate cash policy on firm’s value. It develops the previous research findings in Indonesia, especially in the implication of cash management from the perspective of agency theory and corporate governance.JEL Classification: G32, L21

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Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Source: Data Processingmentioning

confidence: 99%

See 1 more Smart Citation

Does Ownership Structure Pay Attention to The Corporate Cash Policy? Evidence in Indonesia Firms

Hc¹,

Hanafi²

2019

Etikonomi

View full text Add to dashboard Cite

show abstract

“…The larger the standard deviation of cash, the slower the speed of optimal cash adjustment. The smaller the standard deviation of cash, the faster the speed of optimal cash adjustment (Jiang & Lie, 2015;Chang, Deng, & Wang, The optimal cash holdings speed of adjustment and firm value: An empirical study in Indonesia…”

Section: Method Data and Analysismentioning

confidence: 99%

“…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: 98%