Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

An Analysis Regarding Cash Holdings. Empirical Study on the Bucharest Stock Exchange Listed Firms

An Analysis Regarding Cash Holdings. Empirical Study on the Bucharest Stock Exchange Listed Firms AbstractWorldwide corporate cash holdings have significantly increased and have become an important tool for managers. This study explores the factors that influence firms’ behavior regarding cash holdings and the signal that financial conservatism is sending to potential investors. Our data consists in annual observations collected through the Reuters Eikon platform. It includes companies listed on the Bucharest Stock Exchange, the investigated period being 2005-2014. The econometric analysis employs multivariate regression for an unbalanced panel data, using the OLS technique. The results show a positive correlation of cash holdings with the value registered by this indicator in the previous period, fact that might be interpreted as an attempting of the companies to maintain a target level of cash. Also, the results showed a non-linear relationship between leverage and cash holdings, while the tangible assets determine a negative correlation. As regards firm size and ownership concentration, the correlations were not statistically validated. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Scientific Annals of Economics and Business de Gruyter

An Analysis Regarding Cash Holdings. Empirical Study on the Bucharest Stock Exchange Listed Firms

Loading next page...
 
/lp/de-gruyter/an-analysis-regarding-cash-holdings-empirical-study-on-the-bucharest-oLB0eB0M65
Publisher
de Gruyter
Copyright
© 2017 Elena Alexandra Nenu et al., published by De Gruyter Open
eISSN
2501-3165
DOI
10.1515/saeb-2017-0019
Publisher site
See Article on Publisher Site

Abstract

AbstractWorldwide corporate cash holdings have significantly increased and have become an important tool for managers. This study explores the factors that influence firms’ behavior regarding cash holdings and the signal that financial conservatism is sending to potential investors. Our data consists in annual observations collected through the Reuters Eikon platform. It includes companies listed on the Bucharest Stock Exchange, the investigated period being 2005-2014. The econometric analysis employs multivariate regression for an unbalanced panel data, using the OLS technique. The results show a positive correlation of cash holdings with the value registered by this indicator in the previous period, fact that might be interpreted as an attempting of the companies to maintain a target level of cash. Also, the results showed a non-linear relationship between leverage and cash holdings, while the tangible assets determine a negative correlation. As regards firm size and ownership concentration, the correlations were not statistically validated.

Journal

Scientific Annals of Economics and Businessde Gruyter

Published: Oct 1, 2017

References