Title:	Firm value and corporate cash holdings. Empirical evidence from the polish listed firms
Authors:	Anton, Sorin Gabriel Afloarei Nucu, Anca Elena
Citation:	E+M. Ekonomie a Management = Economics and Management. 2019, roč. 22, č. 3, s. 121-134.
Issue Date:	2019
Publisher:	Technická univerzita v Liberci
Document type:	článek article
URI:	http://hdl.handle.net/11025/35645
ISSN:	1212-3609 (Print) 2336-5604 (Online)
Keywords:	držby hotovosti;rozvíjející se ekonomika;pevná hodnota;finanční omezení;finanční krize
Keywords in different language:	cash holdings;emerging economy;firm value;financing constraints;financial crisis
Abstract in different language:	In the context of imperfect markets, it is important to understand the relationship between nonearning assets and firm value, in order to evaluate the corporate financial policies and to attain the right equilibrium between liquidity and profitability. The aim of our paper is to assess the relationship between corporate cash holdings and firm value for a sample of 719 Polish listed firms over the period 2007-2016. The study reports an inverted U-shape relationship between cash holdings and firm value, irrespective of whether we use static regression methods or dynamic panel regression. Our results confirm the existence of an optimum level of cash holdings at 27.06% of total assets. Furthermore, the nonlinear relationship between firm value and corporate cash holdings is found for all Polish listed firms, financially and less financially constrained. We report two breakpoints of the cash-value relationship, in the context of financial constraints, and the results indicate that the optimum level of cash holdings is much higher for financially constrained firms than less financially constrained ones. Finally, we show that the financial crisis has no additional impact on the nonlinear relationship between cash holdings and firm value. We validate the financial constraints as having a more pronounced effect on the relationship between corporate cash holdings and firm value, compared to the financial crisis, as intervening effects, in the context of the Polish economy. This study holds important microeconomics policy implications – firm-level financial policies should evaluate the tradeoff between cash holdings and market value in order to maintain the firm financial performance.
Rights:	CC BY-NC 4.0
Appears in Collections:	Číslo 3 (2019) Číslo 3 (2019)

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.