The Global Financial Crisis and Adjustment Speed of Cash Holdings

Yıl 2021, Cilt: 9 Sayı: 4, 1099 - 1110, 31.08.2021

Hasan Tekin Ali Yavuz Polat Erhan Muğaloğlu

https://doi.org/10.18506/anemon.888504

Öz

Cash holding is of strategic importance when access to external financing is limited. Cash retention becomes very important for companies to continue their existence, especially with external shocks. Specifically, the demand function of cash assets may change depending on the 2008-2009 Global Financial Crisis (CFC), which offers a natural experimentation opportunity. Based on the optimal cash holdings theory, this study investigates the adjustment speed of cash holdings of nonfinancial firms listed in Borsa Istanbul (BIST) before and after the GFC including the period 2003-2018. The generalized method of moments (GMM) is employed to mitigate any endogeneity problem. The findings show that firms in BIST increase the adjustment speed of cash holdings during and after the GFC using more cash stocks due to declining credit supply and rising credit costs during the GFC. As a general implication, owners and managers should determine an accurate cash holding policy for their firm by considering factors affecting corporate finance and the cost of carry cash during any uncertainty.

Anahtar Kelimeler

Adjustment Speed, Global Financial Crisis (GFC), Cash Holdings

Küresel Finansal Kriz ve Nakit Tutma Ayarlama Hızı

Öz

Dış finansmana erişimin sınırlı olduğu zamanlarda nakit tutma stratejik bir öneme sahip olmaktadır. Likit varlıklar, özellikle dış şoklarla birlikte firmaların varlıklarını devam ettirebilmeleri için çok önemli hale gelmektedir. Öyle ki, nakit varlıkların talep fonksiyonu, doğal bir deney imkânı sunan 2008-2009 Küresel Finansal Krizine (KFK) bağlı olarak değişebilmektedir. Optimum nakit tutma teorisine dayanan bu çalışma, KFK’den önce ve sonra Borsa İstanbul (BİST)'da işlem gören finansal olmayan firmaların nakit varlıklarının ayarlama hızını 2003-2018 zaman dilimi için incelemektedir. Herhangi bir içsellik problemini azaltmak için genelleştirilmiş momentler yöntemi (GMM) kullanılmıştır. Bulgular, BİST’teki firmaların KFK sırasında kredi arzının azalması ve dış fonlama maliyetlerinin de artmasından dolayı daha fazla nakit stoku kullanmaları neticesinde, kriz ve sonrasında nakit varlıklarının ayarlama hızının arttığını göstermektedir. Genel bir sonuç olarak, firma sahipleri ve yöneticileri, krizler gibi yüksek belirsizlik ortamlarında kurumsal finansmanı etkileyen faktörleri de göz önünde bulundurarak ve nakit tutmanın maliyetini hesaba katarak, firmaları için doğru nakit tutma politikası belirlemelidirler.

Anahtar Kelimeler

Ayarlama Hızı, Küresel Finansal Kriz (KFK), Nakit Tutma

Kaynakça

• Alves, P. (2018). Cash holdings around the world: financial crisis, culture and shareholder rights. (No. 89861). University Library of Munich, Germany.
• Arslan-Ayaydin, O., Florackis, C, & Ozkan, A. (2014). Financial flexibility, corporate ınvestment and performance: evidence from financial crises. Review of Quantitative Finance and Accounting, 42(2), 211-250.
• Bates, T. W., Chang, C. H, & Chi, J. D. (2018). Why has the value of cash increased over time? Journal of Financial and Quantitative Analysis, 53(2), 749-787.
• Bates, T. W., Kahle, K. M, & Stulz, R. M. (2009). Why do US firms hold so much more cash than they used to? The Journal of Finance, 64(5), 1985-2021.
• Blundell, R, & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115-143.
• Bruno, G. S. (2005). Estimation and inference in dynamic unbalanced panel-data models with a small number of individuals. Stata Journal, 5(4), 473.
• Chen, H. C., Chou, R. K, & Lu, C. L. (2018). Saving for a rainy day: evidence from the 2000 dot-com crash and the 2008 credit crisis. Journal of Corporate Finance, 48, 680-699.
• Chung, H. (2017). R&D investment, cash holdings and the financial crisis: evidence from Korean corporate data. Applied Economics, 49(55), 5638-5650.
• Coldbeck, B, & Ozkan, A. (2018). Comparison of adjustment speeds in target research and development and capital investment: what did the financial crisis of 2007 change. Journal of Business Research, 84, 1-10.
• Duchin, R., Gilbert, T., Harford, J, & Hrdlicka, C. (2017). Precautionary savings with risky assets: when cash is not cash. The Journal of Finance, 72(2), 793-852.
• Flannery, M. J, & Hankins, K. W. (2013). Estimating dynamic panel models in corporate finance. Journal of Corporate Finance, 19, 1-19.
• Guney, Y., Karpuz, A, & Ozkan, N. (2017). R&D investments and credit lines. Journal of Corporate Finance, 46, 261-283.
• Keynes, J. M. (1936). The general theory of employment, interest and money. Macmillan Cambridge University Press, New York.
• Kim, C. S., Mauer, D. C, & Sherman, A. E. (1998). The determinants of corporate liquidity: theory and evidence. Journal of Financial and Quantitative Analysis, 33(3), 335-359.
• Köksal, B, & Orman, C. (2015). Determinants of capital structure: evidence from a major developing economy. Small Business Economics, 44(2), 255-282.
• Lozano, M. B, & Duran, R. F. (2017). Family control and adjustment to the optimal level of cash holding. The European Journal of Finance, 23(3), 266-295.
• Martinez-Sola, C., Garcia-Teruel, P. J, & Martinez-Solano, P. (2018). Cash holdings in SMEs: speed of adjustment, growth and financing. Small Business Economics, 51(4), 823-842.
• Null, R, & Pathak, R. (2019). Corporate cash holding during crisis and beyond: what matters the most. International Journal of Managerial Finance, 15(4), 492-510.
• Opler, T., Pinkowitz, L., Stulz, R, & Williamson, R. (1999). The determinants and implications of corporate cash holdings. Journal of Financial Economics, 52(1), 3-46.
• Ozkan, A, & Ozkan, N. (2004). Corporate cash holdings: an empirical investigation of UK companies. Journal of Banking & Finance, 28(9), 2103-2134.
• Özçelik, B. D. (2017). Effects of 2008 global economic crisis on manufacturing companies listed at Borsa Istanbul. Finans Politik & Ekonomik Yorumlar, 54(634), 9-26.
• Pinkowitz, L., Stulz, R. M, & Williamson, R. (2016). Do US firms hold more cash than foreign firms do? Review of Financial Studies, 29(2), 309-348.
• Polat, A. Y. (2020). Borç vadesi ve finansal kriz: Türkiye örneği. Erciyes Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, (1), 118-130.
• Shiau, H. L., Chang, Y. H, & Yang, Y. J. (2018). The cash holdings and corporate investment surrounding financial crisis: the cases of China and Taiwan. The Chinese Economy, 51(2), 175-207.
• Song, K. R, & Lee, Y. (2012). Long-term effects of a financial crisis: evidence from cash holdings of East Asian firms. Journal of Financial and Quantitative Analysis, 47(03), 617-641.
• Sun, Z, & Wang, Y. (2015). Corporate precautionary savings: evidence from the recent financial crisis. The Quarterly Review of Economics and Finance, 56, 175-186.
• Tekin, H. (2020a). Firm size and dividend policy of European firms: evidence from financial crises. Marmara Journal of European Studies, 28(1), 109-121.
• Tekin, H. (2020b). How optimal cash changed by the global financial crisis? a multi-country analysis. Economics and Business Letters, 9(2), 114-123.
• Tekin, H. (2020c). Market differences and adjustment speed of debt, equity, and debt maturity. Australian Journal of Management, 0312896220968266.
• Tekin, H, & Polat, A. Y. (2020). Is saving vital? evidence from the financial crisis. Economics and Business Letters, 9(2), 124-134.
• Tekin, H., & Polat, A. Y. (2021). Adjustment speed of debt maturity: evidence from financial crises in East Asia. Bulletin of Monetary Economics and Banking, 24(1), 71-92.
• Yiğit, F. (2020). Nakit tutma oranının finansal ve kurumsal belirleyicileri: Borsa İstanbul üzerine bir inceleme. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 34(3), 1127-1151.