JEFMS Journal

Google Scholar

Article Pdf

---

ABSTRACT:

This research aims to empirically test the influence of firm size, leverage, and peer effect on cash holding. The population of this research is 110 companies in property real estate and building construction sector that listed on the Indonesia Stock Exchange (BEI) in 2018-2022 period. The number of sample on this research is 61 which the criteria of sample is companies in property real estate and building construction sector that listed on the Indonesia Stock Exchange (BEI) in 2018-2022 period consecutively. Data testing uses SPSS25 software. The analysis technique used in this research is multiple linear regression. The results of this research indicate firm size influence cash holding. Meanwhile, leverage and peer effect have no effect on cash holding.

KEYWORDS:

Cash Holding, Firm Size, Leverage, Peer Effect

REFERENCES:

1) Almustafa, H., & Kalash, I. (2022). The dynamic relationship between firms’ cash reserves and financial leverage: evidence from MENA emerging markets. Journal of Economic and Administrative Sciences. https://doi.org/10.1108/jeas-05-2022-0121

2) Arora, R. K. (2019). Corporate cash holdings: An empirical investigation of Indian companies. Global Business Review, 20(4), 1088–1106. https://doi.org/10.1177/0972150919844911

3) Bates, T. W., Kahle, K. M., & Stulz, R. M. (2006). Why do U.S firms hold so much more cash than they used to? NBER Working Paper Series, Mi, 5–24.

4) Batuman, B., Yildiz, Y., & Karan, M. B. (2022). The impact of the global financial crisis on corporate cash holdings: Evidence from Eastern European countries. Borsa Istanbul Review, 22(4), 678–687. https://doi.org/10.1016/j.bir.2021.10.002

5) Berger, A., & Udell, G. (1998). The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle. Journal of Banking and Finance, 22(6–8), 613–673. https://doi.org/10.1016/S0378-4266(98)00038-7

6) Bughsan, A., Alnori, F., & Bakry, W. (2022). The determinants of corporate cash holdings: evidence from Shariah-compliant and non-Shariah- compliant corporations. https://doi.org/10.2139/ssrn.3729096.This

7) Chen, Y. W., Chan, K., & Chang, Y. (2019). Peer effects on corporate cash holdings. International Review of Economics and Finance, 61, 213–227. https://doi.org/10.1016/j.iref.2019.02.008

8) Diaw, A. (2021). Corporate cash holdings in emerging markets. Borsa Istanbul Review, 21(2), 139–148. https://doi.org/10.1016/j.bir.2020.09.005

9) Fama, E. F., & French, K. R. (1998). Value versus growth: The international evidence. Journal of Finance, 53(6), 1975–1999. https://doi.org/10.1111/0022-1082.00080

10) Ferreira, M. A., & Vilela, A. S. (2004). Why do firms hold cash? Evidence from EMU countries. European Financial Management, 10(2), 295–319. https://doi.org/10.1111/j.1354-7798.2004.00251.x

11) Ghozali, I. (2018). Aplikasi analisis multivariate dengan program IBM SPSS 25 edisi ke-9. http://slims.umn.ac.id//index.php?p=show_detail&id=19545

12) Gill, A., & Shah, C. (2011). Determinants of corporate cash holdings: Evidence from Canada. International Journal of Economics and Finance, 4(1). https://doi.org/10.5539/ijef.v4n1p70

13) Graham, J. R., & Harvey, C. R. (2001). The theory and practice of corporate finance: Evidence from the field. Journal of Financial Economics, 60(2–3), 187–243. https://doi.org/10.1016/S0304-405X(01)00044-7

14) Grossman, S., & Hart, O. (1982). Corporate financial structure and managerial incentives. In The Economics of Information and Uncertainty: Vol. I. https://doi.org/10.7208/chicago/9780226555652.001.0001

15) He, Z. (2019). Corporate cash holdings: An empirical investigation in listed publishing companies in China. 2019 16th International Conference on Service Systems and Service Management (ICSSSM), 1–6

16) Horne, J. C. Van, & Wachowicz, J. M. (2001). Fundamemtal of Financial management.

17) Jebran, K., Iqbal, A., Bhat, K. U., Khan, M. A., & Hayat, M. (2019). Determinants of corporate cash holdings in tranquil and turbulent period: evidence from an emerging economy. Financial Innovation, 5(1). https://doi.org/10.1186/s40854-018-0116-y

18) Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. In Journal of Financial Economics (Vol. 3). Q North-Holland Publishing Company.

19) Jinkrawee, J., Lonkani, R., & Suwanaphan, S. (2021). A matter of others’ money: How cash holdings of other firms affect a firm’s cash holding? International Journal of Emerging Markets. https://doi.org/10.1108/IJOEM-03-2021-0398

20) Kaplan, S. N. (1993). The evolution of buyout pricing and financial structure (or, what went wrong). Journal of Applied Corporate Science.

21) Machokoto, M., Chipeta, C., & Ibeji, N. (2021). The institutional determinants of peer effects on corporate cash holdings. In Journal of International Financial Markets, Institutions and Money (Vol. 73, Issue June). Elsevier B.V. https://doi.org/10.1016/j.intfin.2021.101378

22) Magerakis, E., Gkillas, K., Tsagkanos, A., & Siriopoulos, C. (2020). Firm size does matter: New evidence on the determinants of cash holdings. Journal of Risk and Financial Management, 13(8). https://doi.org/10.3390/jrfm13080163

23) Miller, M. H., & Orr, D. (1966). A model of the demand for money by firms. Quarterly Journal of Economics, 80(3), 413–435. https://doi.org/10.2307/1880728

24) Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance, and the theory of investment. The American Economic Review, 103(6), i–viii. https://doi.org/10.1257/aer.103.6.i

25) Myers, S. C. (1984). The Capital Structure Puzzle. The Journal of Finance, 39(3), 574–592. https://doi.org/10.1111/j.1540-6261.1984.tb03646.x

26) Nguyen, N. H., & Li, W. H. (2022a). Peer effects on corporate cash holdings: Evidence from Vietnam. Asian Review of Financial Research, 35(2), 73–105. https://doi.org/10.37197/ARFR.2022.35.2.3

27) Nguyen, N. H., & Li, W. H. (2022b). Peer Effects on Corporate Cash Holdings: Evidence from Vietnam. Asian Review of Financial Research, 35(2), 73–105. https://doi.org/10.37197/ARFR.2022.35.2.3

28) Opler, T., Stultz, R., Williamson, R., & Pinkowitz, L. (1999). The determinants and implications of corporate cash holdings. Journal of Financial Economics, 40(5), 223–228.

29) Rajan, G., & Zingales, A. (1995). What do we kno w about capital structure? some evidence from international data. The Journal of Finance, 50(5), 1421–1460. https://doi.org/10.1111/j.1540-6261.1995.tb05184.x

30) Rasyid, R., & Davidson. (2020). The influence of profitability, liquidity, firm size and leverage on cash Holding. Advance in Social Science, Education, and Humanities Research, 478(1). https://doi.org/10.2991/assehr.k.201209.062

31) Xingshuo, T. (2020). Peer effects on Chinese corporate cash holdings: A fixed-effects model. Proceedings - 2020 2nd International Conference on Economic Management and Model Engineering, ICEMME 2020, 506–509. https://doi.org/10.1109/ICEMME51517.2020.00107