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CASH HOLDING LEVEL ANALYSIS ON INDUSTRIAL BASIS: EVIDENCE FROM LISTED NON-FINANCIAL FIRMS ON BORSA ISTANBUL

Year 2017, , 615 - 630, 01.08.2017
https://doi.org/10.17130/ijmeb.2017331323

Abstract

In attempt to cope with costs of cash surplus and cash deficits,firms have adopted various approaches in determining the optimum cash level that will increase the market value. In this study, changes in the cash and net cash holdings of the real sector firms listed on Borsa Istanbul BIST between 2005 and 2015 have been investigated within the framework of the trade-off and financial hierarchy theories.. Findings reveal that cash holdings are mean reverting and firms have the target cash level considering the benefit and cost of holding cash which is in line with the trade-off theory. Furthermore, results exhibit that sectoral characteristics have a significant role in determining the optimum level of cash

References

  • Al-Najjar, B. (2013). The financial determinants of corporate cash holdings: Evidence from some emerging markets. International Business Review, 22 (1), 77-88.
  • Ali, A. & Yousaf, S. (2013). Determinants of cash holding in German market. Journal of Business and Management, 12(6), 28- 34.
  • Anagnostopoulou, S. (2013). Cash holdings: Determining factors and impact on future operating performance for listed versus unlisted firms. Review of Pacific Basin Financial Markets and Policies, (16)2, 1-47.
  • Aras, G. & Kutlu Furtuna, Ö. (2016, Aralık). Insights from corporate cash holdings in emerging markets. Proceedings of 7th European Business Research Conference, University of Roma Tre, Rome, Italy ISBN: 978-1-925488-203-4.
  • Aras, G., Tezcan, N., Kutlu Furtuna, Ö., & Aybars, A. (2014). Firmaların ar-ge ve inovasyon performansının stratejik analizi. İstanbul Ticaret Odası KOBİ Araştırmaları, Yayın No: 2014-10.
  • Bates, T. W., Kahle, K. M., & Stulz, R. (2009). Why do US firms hold so much more cash than they used to? Journal of Finance, 64 (5), 1985–2021..
  • Baumol, W. J. (1952). The transactions demand for cash: An inventory theoretic approach. Quarterly Journal of Economics, 66, 545-556.
  • Begenau, J. & Palazzo, B. (2016). Firm selection and corporate cash holdings. Harvard Business Schol Working Paper, 16-130.
  • Belkhir, M., Boubaker S. & Derouiche I. (2014). Control–ownership wedge, board of directors, and the value of excess cash. Economic Modelling, 39, 110–122.
  • Borhanuddin, R. & Ching P. (2011). Cash holdings, leverage, ownership concentration and board independence: Evidence from Malaysia, Malaysian Accounting Review, (10)1, 63-88.
  • Brisker, E.R., Çolak, G. & Peterson, D.R. (2013). Changes in cash holdings around the S&P 500 additions. Journal of Banking & Finance, 37, 1787-1807.
  • Chen, Y., Dou, P.Y., Ghon, R., Truong, C, & Veeraraghavan, M. (2015). National culture and corporate cash holdings around the world. Journal of Banking & Finance 50, 1–18.
  • Chen, D. Li, S.Xiao, J.Z., & Zou, H. (2014). The effect of government quality on corporate cash holdings. Journal of Corporate Finance 27, 384-400.
  • Dittmar, A., Mahrt-Smith, J., & Servaes, H. (2003). International corporate governance and corporate cash holdings, Journal of Financial and Quantative Analysis 38(1), 111-133.
  • Erdoğan, M. (2010). Kurumsal yönetim ve şirket nakit tutuşuna etkisi: Bir dinamik panel veri analizi. (Yayınlanmamış Doktora Tezi). Gazi Üniversitesi Sosyal Bilimler Enstitüsü, Ankara.
  • Ferreira, A. & Vilela, S. (2004). Why do companies hold cash? Evidence from EMU countries, European Financial Management, 10(2)-295-319.
  • Francis, B., Iftekhar, H., Liang, S. & Maya, W. (2013). Corporate governance and investment- cash flow sensitivity: Evidence from emerging markets, Emerging Markets Finance and Trade, 57-71.
  • Gill, A. & Shah, C. (2012). Determinants of corporate cash holdings: Evidence from canada. International Journal of Economics and Finance, 4(1), 70-79.
  • Guney, Y., & Ozkan, A. (2006). International evidence on the non-linear impact of leverage on corporate cash holdings, Journal of Multinational Financial Management, 1-16
  • Hall, T., Mateus, C. & Mateus, I. (2014). What determines cash holdings at privately held and publicly traded firms? Evidence from 20 emerging markets. International Review of Financial Analysis, 33,104–116.
  • Jensen, M. (1986). Agency costs of free cash flow, corporate finance, and takeovers, American Economic Review, 76(2), 323-329.
  • Kim, C., D.C. Mauer, & Sherman, A.E. (1998). The determinants of corporate liquidity: theory and evidence. Journal of Financial and Quantative Analysis, 33,335-359.
  • Kuan, T. Li, C. & Liu, S. (2012). Corporate governance and cash holdings: A quantile regression approach, International Review of Economics and Finance, 24, 303–314.
  • Kurtuluş, E. (2007). Nakit yönetimi ve İstanbul Menkul Kıymetler Borsası’nda yer alan işletmelerde nakit yönetimi üzerine bir uygulama, (Yayınlanmamış Yüksek Lisans Tezi). Mersin Üniversitesi Sosyal Bilimler Enstitüsü, Mersin.
  • Kusnadi, Y. & Wei, K.C. (2011). The determinants of corporate cash management policies: Evidence from around the world. Journal of Corporate Finance 17, 725–740.
  • Masood, A. & Shah, A. (2014). Corporate governance and cash holdings in listed non-financial firms in Pakistan. Business Review 9(2), 48-73.
  • Megginson, W.L., & Wei, Z. (2010). Determinants and value of cash holdings: Evidence from China’s privatized firms. SSRN Working Paper Series, 1-37
  • Miller, M.H. & Orr, D. (1966). A model of the demand for money by companies, Quarterly Journal of Economics, 80(3), 413-435.
  • Myers, S.C. & Majluf, N.S.(1984). Corporate financing and investment decisions when firm have information that investors do not have. Journal of Financial Economics, 13(2),187–221.
  • Opler, T., Pinkowitz, L., Stulz, R. & Williamson, R. (1999). The determinants and implications of corporate cash holdings, Journal of Financial Economics 52, 3–46.
  • Ozkan, A. & N. Ozkan. (2002). Corporate cash holdings: An empirical investigation of UK companies. Journal of Banking and Finance, 28, 2103-2134.
  • Pinkowitz, L., Stulz, R. & Williamson, R., (2006). Does the contribution of corporate cash holdings and dividends to firm value depend on governance? A cross-country analysis. Journal of Finance, 61, 2725–2751.
  • Ramirez, A. & Tadesse, S. (2009). Corporate cash holdings, uncertainty avoidance, and multinationality of firms. International Business Review, 18, 387–403.
  • Rızwan, M.F. & Javed, T. (2011). Determinants of corporate cash holdings: Evidence from Pakistani corporate sector. Economics, Management, and Financial Markets 6(1), 344– 358.
  • Seifert, B. & Gönenç, H. (2016), Creditor rights, country governance, and corporate cash holdings. Journal of International Financial Managememt Accounting, 27, 65–90.
  • Subramaniam, V., Tony, T. Tang & Heng, Yue, X., (2011). Firm structure and corporate cash holdings, Journal of Corporate Finance, 17, 759-773.
  • Uyar, A. & Kuzey, C. (2014). Determinants of corporate cash holdings: evidence from the emerging market of Turkey. Applied Economics 46(9), 1035–1048.
  • Verduyn, S. (2013). An empirical analysis of the determinants of cash holdings of non-financial Turkish listed companies. (Master Thesis). Dokuz Eylul University Social Science Institute, İzmir.

NAKİT BULUNDURMA DÜZEYİNİN SEKTÖREL ANALİZİ: BORSA İSTANBUL’DA İŞLEM GÖREN REEL SEKTÖR FİRMALARI ÜZERİNE BİR UYGULAMA

Year 2017, , 615 - 630, 01.08.2017
https://doi.org/10.17130/ijmeb.2017331323

Abstract

Firmaların nakit fazlalığı ve nakit yetersizliği durumunda ortaya çıkabilecek maliyetleri azaltarak piyasa değerini arttıracak optimum nakit tutarının belirlenmesinde farklı yaklaşımlar uyguladıkları görülmektedir. Bu çalışmada, 2005-2015 yılları arasında Borsa İstanbul BİST ’de işlem gören reel sektör firmalarının nakit ve net nakit bulundurma düzeyinde yıllar itibariyle meydana gelen değişimler sermaye yapısı teorilerinden dengeleme teorisi ve finansal hiyerarşi teorisi kapsamında açıklanmıştır. Çalışmanın bulguları, ilgili dönemde reel sektör firmalarının nakit bulundurma düzeyinin genel ortalamaya yaklaştığını, firmaların nakit tutmanın fayda ve maliyetini dikkate alarak hedef nakit düzeyine sahip olduklarını ve dengeleme teorisine uygun hareket ettiklerini göstermektedir. Ayrıca, optimum nakit düzeyinin belirlenmesinde sektörel faktörlerin belirgin rol oynadığını göstermektedir.

References

  • Al-Najjar, B. (2013). The financial determinants of corporate cash holdings: Evidence from some emerging markets. International Business Review, 22 (1), 77-88.
  • Ali, A. & Yousaf, S. (2013). Determinants of cash holding in German market. Journal of Business and Management, 12(6), 28- 34.
  • Anagnostopoulou, S. (2013). Cash holdings: Determining factors and impact on future operating performance for listed versus unlisted firms. Review of Pacific Basin Financial Markets and Policies, (16)2, 1-47.
  • Aras, G. & Kutlu Furtuna, Ö. (2016, Aralık). Insights from corporate cash holdings in emerging markets. Proceedings of 7th European Business Research Conference, University of Roma Tre, Rome, Italy ISBN: 978-1-925488-203-4.
  • Aras, G., Tezcan, N., Kutlu Furtuna, Ö., & Aybars, A. (2014). Firmaların ar-ge ve inovasyon performansının stratejik analizi. İstanbul Ticaret Odası KOBİ Araştırmaları, Yayın No: 2014-10.
  • Bates, T. W., Kahle, K. M., & Stulz, R. (2009). Why do US firms hold so much more cash than they used to? Journal of Finance, 64 (5), 1985–2021..
  • Baumol, W. J. (1952). The transactions demand for cash: An inventory theoretic approach. Quarterly Journal of Economics, 66, 545-556.
  • Begenau, J. & Palazzo, B. (2016). Firm selection and corporate cash holdings. Harvard Business Schol Working Paper, 16-130.
  • Belkhir, M., Boubaker S. & Derouiche I. (2014). Control–ownership wedge, board of directors, and the value of excess cash. Economic Modelling, 39, 110–122.
  • Borhanuddin, R. & Ching P. (2011). Cash holdings, leverage, ownership concentration and board independence: Evidence from Malaysia, Malaysian Accounting Review, (10)1, 63-88.
  • Brisker, E.R., Çolak, G. & Peterson, D.R. (2013). Changes in cash holdings around the S&P 500 additions. Journal of Banking & Finance, 37, 1787-1807.
  • Chen, Y., Dou, P.Y., Ghon, R., Truong, C, & Veeraraghavan, M. (2015). National culture and corporate cash holdings around the world. Journal of Banking & Finance 50, 1–18.
  • Chen, D. Li, S.Xiao, J.Z., & Zou, H. (2014). The effect of government quality on corporate cash holdings. Journal of Corporate Finance 27, 384-400.
  • Dittmar, A., Mahrt-Smith, J., & Servaes, H. (2003). International corporate governance and corporate cash holdings, Journal of Financial and Quantative Analysis 38(1), 111-133.
  • Erdoğan, M. (2010). Kurumsal yönetim ve şirket nakit tutuşuna etkisi: Bir dinamik panel veri analizi. (Yayınlanmamış Doktora Tezi). Gazi Üniversitesi Sosyal Bilimler Enstitüsü, Ankara.
  • Ferreira, A. & Vilela, S. (2004). Why do companies hold cash? Evidence from EMU countries, European Financial Management, 10(2)-295-319.
  • Francis, B., Iftekhar, H., Liang, S. & Maya, W. (2013). Corporate governance and investment- cash flow sensitivity: Evidence from emerging markets, Emerging Markets Finance and Trade, 57-71.
  • Gill, A. & Shah, C. (2012). Determinants of corporate cash holdings: Evidence from canada. International Journal of Economics and Finance, 4(1), 70-79.
  • Guney, Y., & Ozkan, A. (2006). International evidence on the non-linear impact of leverage on corporate cash holdings, Journal of Multinational Financial Management, 1-16
  • Hall, T., Mateus, C. & Mateus, I. (2014). What determines cash holdings at privately held and publicly traded firms? Evidence from 20 emerging markets. International Review of Financial Analysis, 33,104–116.
  • Jensen, M. (1986). Agency costs of free cash flow, corporate finance, and takeovers, American Economic Review, 76(2), 323-329.
  • Kim, C., D.C. Mauer, & Sherman, A.E. (1998). The determinants of corporate liquidity: theory and evidence. Journal of Financial and Quantative Analysis, 33,335-359.
  • Kuan, T. Li, C. & Liu, S. (2012). Corporate governance and cash holdings: A quantile regression approach, International Review of Economics and Finance, 24, 303–314.
  • Kurtuluş, E. (2007). Nakit yönetimi ve İstanbul Menkul Kıymetler Borsası’nda yer alan işletmelerde nakit yönetimi üzerine bir uygulama, (Yayınlanmamış Yüksek Lisans Tezi). Mersin Üniversitesi Sosyal Bilimler Enstitüsü, Mersin.
  • Kusnadi, Y. & Wei, K.C. (2011). The determinants of corporate cash management policies: Evidence from around the world. Journal of Corporate Finance 17, 725–740.
  • Masood, A. & Shah, A. (2014). Corporate governance and cash holdings in listed non-financial firms in Pakistan. Business Review 9(2), 48-73.
  • Megginson, W.L., & Wei, Z. (2010). Determinants and value of cash holdings: Evidence from China’s privatized firms. SSRN Working Paper Series, 1-37
  • Miller, M.H. & Orr, D. (1966). A model of the demand for money by companies, Quarterly Journal of Economics, 80(3), 413-435.
  • Myers, S.C. & Majluf, N.S.(1984). Corporate financing and investment decisions when firm have information that investors do not have. Journal of Financial Economics, 13(2),187–221.
  • Opler, T., Pinkowitz, L., Stulz, R. & Williamson, R. (1999). The determinants and implications of corporate cash holdings, Journal of Financial Economics 52, 3–46.
  • Ozkan, A. & N. Ozkan. (2002). Corporate cash holdings: An empirical investigation of UK companies. Journal of Banking and Finance, 28, 2103-2134.
  • Pinkowitz, L., Stulz, R. & Williamson, R., (2006). Does the contribution of corporate cash holdings and dividends to firm value depend on governance? A cross-country analysis. Journal of Finance, 61, 2725–2751.
  • Ramirez, A. & Tadesse, S. (2009). Corporate cash holdings, uncertainty avoidance, and multinationality of firms. International Business Review, 18, 387–403.
  • Rızwan, M.F. & Javed, T. (2011). Determinants of corporate cash holdings: Evidence from Pakistani corporate sector. Economics, Management, and Financial Markets 6(1), 344– 358.
  • Seifert, B. & Gönenç, H. (2016), Creditor rights, country governance, and corporate cash holdings. Journal of International Financial Managememt Accounting, 27, 65–90.
  • Subramaniam, V., Tony, T. Tang & Heng, Yue, X., (2011). Firm structure and corporate cash holdings, Journal of Corporate Finance, 17, 759-773.
  • Uyar, A. & Kuzey, C. (2014). Determinants of corporate cash holdings: evidence from the emerging market of Turkey. Applied Economics 46(9), 1035–1048.
  • Verduyn, S. (2013). An empirical analysis of the determinants of cash holdings of non-financial Turkish listed companies. (Master Thesis). Dokuz Eylul University Social Science Institute, İzmir.
There are 38 citations in total.

Details

Primary Language Turkish
Journal Section Research Article
Authors

Özlem Kutlu Furtuna This is me

Publication Date August 1, 2017
Published in Issue Year 2017

Cite

APA Furtuna, Ö. K. (2017). NAKİT BULUNDURMA DÜZEYİNİN SEKTÖREL ANALİZİ: BORSA İSTANBUL’DA İŞLEM GÖREN REEL SEKTÖR FİRMALARI ÜZERİNE BİR UYGULAMA. Uluslararası Yönetim İktisat Ve İşletme Dergisi, 13(3), 615-630. https://doi.org/10.17130/ijmeb.2017331323