Factors affecting the level of cash holding of companies listed in Vietnam stock market

Abstract

Understanding factors affecting the level of cash holding is and has been a challenging task in finance to reach business objectives. That is the reason why cash management is as much an integral part of business cycle in any period. Statistical and econometrical models are broadly used in analysis of specific factors affecting. This paper investigates the factors affecting the level of cash holding with the combined application of descriptive statistics, univariate analysis and regression methods such as model Fama–MacBeth, regression using cross-sectional data of average value, pooled OLS regression with year dummies, pooled OLS regression with year dummies and industry dummies. This paper also outlines the practical steps which need to be undertaken to use above methods on companies listed in Vietnam stock market. A framework for each methodology is drawn up. The emphasis is on analysis trend of factors affecting the level of cash holding when being put in consideration and explanation with related theories. The main goal of this study is to present the result of each method and factors affecting the level of cash holding in order to bring general insights of Vietnam stock market to help individual investors make decisions. Keywords: Vietnam stock market, descriptive, univariate, regression, level of cash holding.