| dc.description.abstract | This paper studies the determinants of corporate cash holdings. It uses data of
99 firms listed on Ho Chi Minh Stock Exchange to find out the effects of seven firms
characteristics (cash flow, capital expenditures, growth opportunity, leverage, dividend
payout, firm size and the level of liquid assets substitutes for cash) on the level of cash
holdings in fiscal year of 2012. Consistent with previous studies, the paper use trade-off
theory and pecking order theory to predict and explain the findings. Following the trade
of theory the level of cash holdings is defined by comparing its marginal cost and
marginal benefits and is decided based on the financing and investment activities under
pecking theory. Cash holdings bring more benefits for firms when other internal funds
cannot meet the firms’ demand and outside funds are costly. The research uses OLS
model to estimate the coefficient of independent variables. Additionally, assumptions
tests are also included to ensure that OLS estimators are unbiased. I find evidence to
come up with the conclusion that cash holdings are positively related to cash flow,
dividend payment and growth opportunity. On the other hand, there is a negative
relationship between cash holdings and capital expenditures, leverage, level of liquid
assets and firm size. | en_US |
