The financial determinants of corporate cash holdings in an oil rich country: Evidence from Kingdom of Saudi Arabia

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ID: 97050
2017
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Abstract
This paper investigates the determinants of the cash holdings for a sample of Saudi firms over the period 2006–2014, using static and dynamic panel models. Our results show that leverage, firm size, capital expenditure, net working capital and cash flow volatility are important in determining cash holdings. When we divide our sample into two sub-samples: petrochemical and non-petrochemical firms, our results show a significant difference between the determinants of cash holdings of the two groups of firms. We also investigate the characteristics of high liquid firms (conservative firms). The results indicate that conservative firms are less leveraged, have large size, have low investment expenditures and have low cash flow fluctuation. Furthermore, dynamic panel estimation indicates that Saudi firms adjust their liquidity holdings quickly towards an endogenous target cash ratio.
Reference Key
guizani2017theborsa Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Guizani, Muncef;
Journal borsa istanbul review
Year 2017
DOI
DOI not found
URL
http://www.sciencedirect.com/science/article/pii/S2214845017300017
Keywords
business economics as a science finance management. industrial management accounting. bookkeeping

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