Determinants of Corporate Cash Holdings Case of Textile Sector in PakistanShaukat Ali1*, Mishkat Ullah2and Nazir Ullah3
- *Corresponding Author:
- Shaukat Ali
Institute of Business and Management Science
The University of Agriculture
E-mail: [email protected]
Received date: February 06, 2016; Accepted date: March 04, 2016; Published date: March 07, 2016
Citation:Ali S, Ullah M, Ullah N (2016) Determinants of Corporate Cash Holdings “A Case of Textile Sector in Pakistan”. Int J Econ Manag Sci 5:334. doi: 10.4172/2162-6359.1000334
Copyright: © 2016 Ali S, et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
The topic on cash holding has attracted strong debate in the field of financial management for the past half century. A number of researchers studied the topic corporate cash holding and its determinants in the past in developed economies while a little attention is given to the corporate cash holdings of developing economies. The objective of the study is to identify and measure the relationship of firm size, profitability, net working capital and leverage and their effect on corporate cash holdings. A sample of 30 textile firms of Pakistan listed on Karachi Stock Exchange (KSE) was selected for the study, for the reason of examining their relationship. Secondary data for the period 2006-2013 was selected for the study. Variance Inflation Test (VIF) was used to check the problem of multicollinearity. Multiple regression models were used to conduct the results. Results calculated by regression model show consistency with the literature available. Profitability (ROA) and firm size (FS) show a positive and significant relation with cash holding. However negative and significant relationship was found between net working capital (NWC) and leverage (LEV) with cash holding.
The findings of the study will be useful for financial managers, financial practitioners, consultants and investors.