A South African Perspective on the Corporate Cash Holding Conundrum

Ilse Botha and Carol Thompson
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Carol Thompson: University of Johannesburg

Chapter Chapter 3 in Applied Economic Research and Trends, 2024, pp 37-50 from Springer

Abstract: Abstract In recent years, much media attention has been given to cash holding increases of non-financial companies all over the globe. The objective of this chapter is to investigate the cash holding behavior of South African financial and non-financial firms listed on the Johannesburg Stock Exchange (JSE). Internal and external cash holding determinants of South African financial and non-financial firms listed on the Johannesburg Stock Exchange (JSE) are identified. For the purpose of this study, financial, market, and economic data were analyzed for the period 2005–2019. Panel regression analysis was employed, and it was found that the fixed effects (FE) model suited the data best. The contribution of this study is the inclusion of financial firms to identify internal and external determinants of cash holdings in a South African contexts. Findings show that the determinants between financial and non-financial firms are similar, although the coefficient sizes of the determinants differed between financial and non-financial firms.

Keywords: Cash holdings; Internal and external determinants; Panel regression analysis (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-49105-4_3

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DOI: 10.1007/978-3-031-49105-4_3

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