Factors Affecting Corporate Cash Holding of Non-Financial Firms in Pakistan

Atif Kafayat (), Khalil Ur Rehman () and Farooq M. ()
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Atif Kafayat: University Institute of Management Sciences
Khalil Ur Rehman: University Institute of Management Sciences
Farooq M.: University Institute of Management Sciences

Acta Universitatis Danubius. OEconomica, 2014, issue 10(3), 35-43

Abstract: The previous researches explore the question of why firms hold cash. But there are few researches done in developing countries like Pakistan. The need for cash is characterized by its policies of firms regarding capital structure, working capital requirements, cash flow management, dividend payments, and asset management. In this paper, the impact of these factors is normally analyzed under the framework of Tradeoff theory, Pecking Order Theory and Free Cash Flow Theory. This paper focuses on determining the level of corporate cash holdings of non-financial Pakistani firms, and cash holding requirement among different industries. The data is set for period of 2008- 2012 by using the data of 40companies and 6 industries. The findings of the study support the theories. Which show that firm size, net working capital, leverage, Capital Expenditure and Dividend significantly affect the cash holdings of non-financial firms in Pakistan.

Keywords: cash holding; net working capital; Firm Size; leverage; Capital Expenditure; Dividend (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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