A sector-wise analysis of the determinants of cash holdings in listed firms in Mauritius

Mahdevi Tiagarassa Pillay and Harshana Kasseeah

African Journal of Accounting, Auditing and Finance, 2024, vol. 8, issue 3, 252-278

Abstract: The objective of this study is to investigate the factors that affect cash holdings of selected listed firms in Mauritius. Cash holdings have become more important than ever in this era of uncertainty created by COVID-19 and lockdowns that have affected businesses indiscriminately. Firms having cash holdings are better able to accommodate periods of uncertainty. This study uses data on firms listed on the stock market in Mauritius and covers the 2009-2019 period. The methodology is based on panel data techniques that account for endogeneity among independent variables and potential heterogeneity across observations. The paper finds that several influential factors determine cash holdings, including corporate growth prospects, short-term working capital, leverage, and firm size. The study also finds important sector-wise implications regarding cash holdings.

Keywords: cash holdings; sector-wise analysis; fixed effects; random effects; Mauritius. (search for similar items in EconPapers)
Date: 2024
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