Corporate cash holding: an empirical investigation of public listed companies for trading/service sector in Malaysia

Corporate cash holding: an empirical investigation of public listed companies for trading/service sector in Malaysia

This study investigates the empirical investigation between corporate cash holdings as the dependent variable and firm size, cash flow volatility, leverage and capital expenditure as independent variable by taking Malaysia trading/service sector of public listed companies as the sample over the per...

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Main Author: Rubadharishini, Chelliah
Format: Thesis
Language:eng
eng
Published: 2017
Subjects:
HG Finance
Online Access:https://etd.uum.edu.my/7491/1/s821032_01.pdf
https://etd.uum.edu.my/7491/2/s821032_02.pdf
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id my-uum-etd.7491
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Sallehuddin, Mohd Rashdan
topic HG Finance
spellingShingle HG Finance
Rubadharishini, Chelliah
Corporate cash holding: an empirical investigation of public listed companies for trading/service sector in Malaysia
description This study investigates the empirical investigation between corporate cash holdings as the dependent variable and firm size, cash flow volatility, leverage and capital expenditure as independent variable by taking Malaysia trading/service sector of public listed companies as the sample over the period from 2014 to 2016. This study applied tradeoff and pecking order theory in order to show briefly on corporate cash holdings level. Descriptive analysis and hypothesis analysis are employed to analyze the relationship between those variables. The findings of this study reveal that firm size and leverage are negatively correlated to corporate cash holdings while cash flow volatility and capital expenditure highlights positive relationship to corporate cash holdings as for both tradeoff and pecking order theory. The excess cash holdings are a sign that the firm tends to retain the cash rather than pay it via dividends and there is a possibility that the cash is employed for non-pecuniary benefits which is not analogous to the shareholders' interest. The negative relationship shown by firm size might suggest that larger the firm size enables a firm to gather retain earnings where precisely debt is not important. For leverage, the negative relationship might indicate that corporations having ability to issue new debts holds less cash and used to fund new investments. The positive relationship is exhibited by cash flow volatility and capital expenditure. Companies fail to finance all profitable projects and faces larger cost of external financing where company can be short of liquid asset as suggested by both theories. Companies with high capital expenditure will face high amount of cash due to high cost in capital market reflects financial distress.
format Thesis
qualification_name masters
qualification_level Master's degree
author Rubadharishini, Chelliah
author_facet Rubadharishini, Chelliah
author_sort Rubadharishini, Chelliah
title Corporate cash holding: an empirical investigation of public listed companies for trading/service sector in Malaysia
title_short Corporate cash holding: an empirical investigation of public listed companies for trading/service sector in Malaysia
title_full Corporate cash holding: an empirical investigation of public listed companies for trading/service sector in Malaysia
title_fullStr Corporate cash holding: an empirical investigation of public listed companies for trading/service sector in Malaysia
title_full_unstemmed Corporate cash holding: an empirical investigation of public listed companies for trading/service sector in Malaysia
title_sort corporate cash holding: an empirical investigation of public listed companies for trading/service sector in malaysia
granting_institution Universiti Utara Malaysia
granting_department School of Business Management
publishDate 2017
url https://etd.uum.edu.my/7491/1/s821032_01.pdf
https://etd.uum.edu.my/7491/2/s821032_02.pdf
_version_ 1747828227004432384
spelling my-uum-etd.74912021-08-18T06:35:06Z Corporate cash holding: an empirical investigation of public listed companies for trading/service sector in Malaysia 2017 Rubadharishini, Chelliah Sallehuddin, Mohd Rashdan School of Business Management School of Business Management HG Finance This study investigates the empirical investigation between corporate cash holdings as the dependent variable and firm size, cash flow volatility, leverage and capital expenditure as independent variable by taking Malaysia trading/service sector of public listed companies as the sample over the period from 2014 to 2016. This study applied tradeoff and pecking order theory in order to show briefly on corporate cash holdings level. Descriptive analysis and hypothesis analysis are employed to analyze the relationship between those variables. The findings of this study reveal that firm size and leverage are negatively correlated to corporate cash holdings while cash flow volatility and capital expenditure highlights positive relationship to corporate cash holdings as for both tradeoff and pecking order theory. The excess cash holdings are a sign that the firm tends to retain the cash rather than pay it via dividends and there is a possibility that the cash is employed for non-pecuniary benefits which is not analogous to the shareholders' interest. The negative relationship shown by firm size might suggest that larger the firm size enables a firm to gather retain earnings where precisely debt is not important. For leverage, the negative relationship might indicate that corporations having ability to issue new debts holds less cash and used to fund new investments. The positive relationship is exhibited by cash flow volatility and capital expenditure. Companies fail to finance all profitable projects and faces larger cost of external financing where company can be short of liquid asset as suggested by both theories. Companies with high capital expenditure will face high amount of cash due to high cost in capital market reflects financial distress. 2017 Thesis https://etd.uum.edu.my/7491/ https://etd.uum.edu.my/7491/1/s821032_01.pdf text eng public https://etd.uum.edu.my/7491/2/s821032_02.pdf text eng public masters masters Universiti Utara Malaysia Afza, T., & Adnan, S. (2007). Determinants of corporate cash holdings: A case study of Pakistan. In Proceedings of Singapore Economic Review Conference, 164-184. Ali, A., & Yousaf, S. (2013). Determinants of cash holding in German market. Journal of Business & Management, 12(6), 28–34. Ali, H. (2015). ANALYSIS OF THE INFLUENCE OF SIZE, LEVERAGE, TOBINS’ Q AND CASH FLOW ON CORPORATE CASH HOLDINGS. 2nd Conference in Business, Accounting and Management, 2(1), 392-397. 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