Corporate Cash Holding and Monetary Policy

Yıl 2022, , 101 - 114, 27.04.2022

Baki Cem Şahin , Selçuk Gül

https://doi.org/10.33203/mfy.1044804

Öz

Corporate cash holding behavior is important to understand firms in terms of management and decision-making, and the finance literature provides diverse views on the determinants of corporate cash holdings. In this study, we examine the cash holding decision from a macroeconomic perspective and investigate whether monetary policy affects firms’ cash holding decisions. Our analysis based on Turkish listed non-financial firms suggests that monetary policy has no effect on corporate cash holdings, contrary to recent empirical evidence. In this regard, the results infer that the relationship between monetary policy and cash holding decisions established before in the literature could not be generalizable.

Anahtar Kelimeler

cash holding, monetary policy, dynamic panel estimation

Corporate Cash Holding and Monetary Policy

Öz

Firma nakit tutma davranışı, firmaları yönetim ve karar verme biçimleri açısından anlamak için önemlidir ve finans literatürü kurumsal nakit tutmanın belirleyicileri hakkında çeşitli görüşler sunmaktadır. Bu çalışmada, nakit tutma kararı makroekonomik bir perspektiften incelenmekte ve para politikasının firmaların nakit tutma kararlarını etkileyip etkilemediği araştırılmaktadır. Türkiye'de borsada işlem gören finansal olmayan firmalara dayalı analizimiz, son ampirik kanıtların aksine, para politikasının kurumsal nakit tutma üzerinde etkisi olmadığını göstermektedir. Bu bağlamda sonuçlar, para politikası ile literatürde daha önce kurulmuş olan nakit tutma kararları arasındaki ilişkinin genellenemeyeceği sonucunu göstermektedir.

Anahtar Kelimeler

nakit tutma, para politikası, dinamik panel tahmini

Kaynakça

• Abdioğlu, N., 2016, Managerial ownership and corporate cash holdings: Insights from an emerging market, Business and Economics Research Journal, 7(2), 29-41.
• Altman, Edward I., 2005, An emerging market credit scoring system for corporate bonds, Emerging Markets Review 6, 311–323.
• Al-Najjar, B., 2015, The Effect of Governance Mechanisms on Small and Medium-Sized Enterprise Cash Holdings: Evidence from the United Kingdom, Journal of Small Business Management, 53(2), pp. 303-320.
• Al-Najjar, B., and Clark, E., 2017, Corporate governance and cash holdings in MENA: Evidence from internal and external governance practices, Research in International Business and Finance, 39, 1-12.
• Belghitar, Y., and Khan, J., 2013, Governance mechanisms, investment opportunity set and SMEs cash holdings, Small Business Economics, 40, 59-72.
• Blundell, Richard, and Stephen Bond, 1998, Initial conditions and moment restrictions in dynamic panel data models, Journal of Econometrics 87, 115–143.
• Boubakri, N., El Ghoul, S., and Saffar, W., 2013, Cash holdings of politically connected firms, Journal of Multinational Financial Management, 23, 338-355.
• Chang, K., and Noorbakhsh, A., 2009, Does national culture affect international corporate cash holdings?, Journal of Multinational Financial Management, 19, 323-342.
• Chen, Y., Dou, P. Y., Rhee, S. G., Truong, C., and Veeraraghavan, M., 2015, National culture and corporate cash holdings around the world, Journal of Banking & Finance, 50, 1-18.
• Chen, R., El Ghoul, S., Guedhami, O., and Nash, R., 2018, State Ownership and Corporate Cash Holdings, Journal of Financial and Quantitative Analysis, 53(5), 2293-2334.
• Chen, R., Guedhami, O., Yang, Y., and Zaynutdinova, G. R., 2020, Corporate governance and cash holdings: Evidence from worldwide board reforms, Journal of Corporate Finance, 65, 101771.
• Dang, Viet Anh, Minjoo Kim, and Yongcheol Shin, 2015, In search of robust methods for dynamic panel data models in empirical corporate finance, Journal of Banking and Finance 53, 84–98.
• Demir, E., and Ersan, O., 2017, Economic policy uncertainty and cash holdings: Evidence from BRIC countries, Emerging Markets Review, 33, 189-200.
• Deng, Y., and Yao, H., 2020, Corporate cash holdings and monetary shocks: A test of the credit channel theory, Review of Financial Economics, 00, 1-20.
• Everaert, Gerdie, and Lorenzo Pozzi, 2007, Bootstrap-based bias correction for dynamic panels, Journal of Economic Dynamics and Control 31, 1160–1184.
• Ferreira, Miguel A, and Antonio S Vilela, 2004, Why Do Firms Hold Cash ? Evidence from EMU Countries, 10, 295–319.
• Guizani, M., 2017, The financial determinants of corporate cash holdings in an oil rich country: Evidence from Kingdom of Saudi Arabia, Borsa Istanbul Review, 17(3), 133-143.
• Hanlon, M., Maydew, E.L., and Saavedra, D., 2017, The taxman cometh: Does tax uncertainty affect corporate cash holdings?, Review of Accounting Studies, 22, 1198-1228.
• Hassanein, A., and Kokel, A., 2019, Corporate cash hoarding and corporate governance mechanisms: evidence from Borsa Istanbul, Asia-Pacific Journal of Accounting & Economics, 1-18. Hill, M. D., Fuller, K. P., Kelly, G. W., and Washam, J. O., 2013, Corporate cash holdings and political connections, Review of Quantitative Finance and Accounting, 42, 123-142.
• Huang-Meier, W., Lambertides, N., and Steeley, J. M., 2016, Motives for corporate cash holdings: the CEO optimism effect, Review of Quantitative Finance and Accounting, 47(3), 699-732.
• Im, H. J., Park, H., and Zhao, G., 2017, Uncertainty and the value of cash holdings, Economics Letters, 155, 43-48.
• Jensen, M., 1986, Agency cost of free cash flow, corporate finance, and takeovers, American Economic Review, 76, 3-43.
• Kiviet, Jan F, 1995, On bias, inconsistency, and efficiency of various estimators in dynamic panel data models, Journal of Econometrics 68, 53–78.
• Kusnadi, Y., Yang, Z., and Zhou, Y., 2015, Institutional development, state ownership, and corporate cash holdings: Evidence from China, Journal of Business Research, 68(2), 351-359.
• Liu, Y., Mauer, D. C., and Zhang, Y., 2014, Firm cash holdings and CEO inside debt, Journal of Banking & Finance, 42, 83-100.
• Loudermilk, Margaret S, 2007, Estimation of Fractional Dependent Variables in Dynamic Panel Data Models With an Application to Firm Dividend Policy, Journal of Business & Economic Statistics 25, 462–472.
• Miranda-Lopez, J., Orlova, S., and Sun, L., 2019, CEO network centrality and corporate cash holdings, Review of Quantitative Finance and Accounting, 53(4), 967-1003.
• Myers, S., 1977, Determinants of corporate borrowing, Journal of Financial Economics, 5, 147-175.
• Myers, S., and Majluf, N., 1984, Corporate financing and investment decisions when firms have information that investors do not have, Journal of Financial Economics, 13, 187-220.
• Opler, Tim, Lee Pinkowitz, René Stulz, and Rohan Williamson, 1999, The determinants and implications of corporate cash holdings, Journal of Financial Economics 52, 3–46.
• Ozkan, Aydin, and Neslihan Ozkan, 2004, Corporate cash holdings: An empirical investigation of UK companies, Journal of Banking and Finance 28, 2103–2134.
• Schauten, M. B.J., van Dijk, D., and van der Waal, J.-P., 2013, Corporate Governance and the Value of Excess Cash Holdings of Large European Firms, European Financial Management, 19(5), 991-1016.
• Tran, Q. T., 2020, Monetary loosening and cash holdings: Evidence from an emerging market, Finance Research Letters, 36, 101312.
• Uyar, Ali, and Cemil Kuzey, 2014, Determinants of corporate cash holdings: Evidence from the emerging market of Turkey, Applied Economics 46, 1035–1048.
• Wang, L., 2015, Tax enforcement, corporate tax aggressiveness, and cash holdings, China Finance Review International, Emerald Group Publishing, 5(4), 339-370.
• Xu, N., Chen, Q., Xu, Y., and Chan, K. C., 2016, Political uncertainty and cash holdings: Evidence from China, Journal of Corporate Finance, 40, 276-295.