| dc.description.abstract | Cash holding plays a significant role for success or failure of firms in business because of its effect on firm’s performance as well on market value and book value of the firm. In context of Vietnam now, a lot of companies, or more exactly most of firms are being cash shortage, difficulties in financial management, weak capitalization since 95% of Vietanm companies are small and medium firms. Therefore, cash management or how much cash that firms hold in hand is good for their own business is a cared issue which reflect health of firms. That why the main objective of this study is to investigate the impact of cash holding on market value and book value of the firm in case of public manufacturing firms in Ho Chi Minh City with the sample is 100 manufacturing firms, 600 observations, in period of 6 years 2009-2014 in Ho Chi Minh Stock Exchange (HOSE). This paper will be tested by two proxies, which are MKBOOK1 and MKBOOK2, then the consequences will be compared, sum up and lead to the final decision. The study first empirically tests the existence of an optimal cash level that maximizes market value and book value of the firm. Second, analyzing whether deviations from the optimum cash level go down market value and book value of the firm. The Panel data, Hausman test, fixed effects and random effects are used to conduct the hypothesis tests.
The research’s consequences indicate the optimal cash holding level, in which maximizes market value and book value of the firm, exist; and deviations from both above and below optimal cash holding level reduce market value and book value of the firm. Some conclusions and recommendations were made in order to support the managers as well as workers have the clearer picture of overall culture of cash holding and market value-book value of the firm in case of manufacturing firms in Ho Chi Minh Stock Exchange so that they can perform more effectively. | en_US |
