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Determinants of Corporate Cash Holdings: Firm Level Evidence from Emerging Markets

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Global Business Strategies in Crisis

Part of the book series: Contributions to Management Science ((MANAGEMENT SC.))

Abstract

The objective of this chapter is to investigate the factors affecting corporate cash holdings in five emerging markets, namely Brazil, Indonesia, Mexico, Russia, and Turkey. The sample consists of 1991 firms listed on the major stock exchange of their countries and covers the period between 2009 and 2015. The model is estimated by Arellano–Bond dynamic generalized method of moments. Results show that firms which use higher leverage in their capital structure hold more cash. More profitable firms are shown to have higher levels of cash holdings. Another variable which has a positive effect on the level of cash holdings in any given period is the level of cash holdings in the previous period as shown by the positive and significant coefficient of the lagged dependent variable in the model. Liquidity and firm size have a negative and statistically significant impact on the level of corporate cash holdings. Firms with higher level of capital expenditures are also shown to hold less cash. Finally, growth opportunities do not have a significant impact on the level of cash holdings for the firms in the emerging markets analyzed.

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Author information

Authors and Affiliations

  1. Faculty of Economics, Administrative and Social Sciences, Department of Business Administration, Kadir Has University, Cibali Campus, 34083, Istanbul, Turkey

    Elif Akben-Selcuk

  2. Faculty of Economics and Administrative Sciences, Department of Business Administration, Bahcesehir University, Besiktas Campus, 34353, Istanbul, Turkey

    Ayse Altiok-Yilmaz

Authors
  1. Elif Akben-Selcuk
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  2. Ayse Altiok-Yilmaz
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Correspondence to Elif Akben-Selcuk .

Editor information

Editors and Affiliations

  1. Istanbul Medipol University, Beylikduzu, Istanbul, Turkey

    Ümit Hacioğlu

  2. Istanbul Medipol University , Eyup, Istanbul, Turkey

    Hasan Dinçer

  3. Istanbul Medipol University , Zeytinburnu, Istanbul, Turkey

    Nihat Alayoğlu

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Akben-Selcuk, E., Altiok-Yilmaz, A. (2017). Determinants of Corporate Cash Holdings: Firm Level Evidence from Emerging Markets. In: Hacioğlu, Ü., Dinçer, H., Alayoğlu, N. (eds) Global Business Strategies in Crisis. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-319-44591-5_28

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