TY - JOUR
T1 - The financial determinants of corporate cash holdings
T2 - Evidence from some emerging markets
AU - Al-Najjar, Basil
PY - 2013/2/1
Y1 - 2013/2/1
N2 - This paper investigates corporate cash holdings in developing countries. In particular, we look into the effect of capital structure and dividend policy on cash holdings in Brazil, Russia, India, and China and compare our results with a control sample from the US and the UK. Our sample contains 1992 firms across these countries for the period 2002-2008. We employ Instrumental Variables analysis to control for the endogeneity of the financial policies (cash holdings, capital structure, and dividend policy). Our results show some evidence that capital structure and dividend policy affect cash holdings. There are similarities between developed and developing countries on the factors determining corporate cash holdings. The results of our cross-country model provide evidence that capital structure, dividend policy, and firm size are important factors in determining cash holdings. Finally, we show that firms operating in countries with low shareholder protection hold more cash.
AB - This paper investigates corporate cash holdings in developing countries. In particular, we look into the effect of capital structure and dividend policy on cash holdings in Brazil, Russia, India, and China and compare our results with a control sample from the US and the UK. Our sample contains 1992 firms across these countries for the period 2002-2008. We employ Instrumental Variables analysis to control for the endogeneity of the financial policies (cash holdings, capital structure, and dividend policy). Our results show some evidence that capital structure and dividend policy affect cash holdings. There are similarities between developed and developing countries on the factors determining corporate cash holdings. The results of our cross-country model provide evidence that capital structure, dividend policy, and firm size are important factors in determining cash holdings. Finally, we show that firms operating in countries with low shareholder protection hold more cash.
KW - Brazil
KW - Cash holdings
KW - China
KW - India
KW - Russia
UR - http://www.scopus.com/inward/record.url?scp=84870253615&partnerID=8YFLogxK
U2 - 10.1016/j.ibusrev.2012.02.004
DO - 10.1016/j.ibusrev.2012.02.004
M3 - Article
AN - SCOPUS:84870253615
VL - 22
SP - 77
EP - 88
JO - International Business Review
JF - International Business Review
SN - 0969-5931
IS - 1
ER -