Firm Value and Corporate Cash Holdings. Empirical Evidence from the Polish Listed Firms

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dc.contributor.authorAnton, Sorin Gabriel
dc.contributor.authorAfloarei Nucu, Anca Elena
dc.contributor.otherEkonomická fakultacs
dc.date.accessioned2019-09-16T08:54:21Z
dc.date.available2019-09-16T08:54:21Z
dc.description.abstractIn the context of imperfect markets, it is important to understand the relationship between non-earning 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 non-linear 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.en
dc.formattext
dc.identifier.doi10.15240/tul/001/2019-3-008
dc.identifier.eissn2336-5604
dc.identifier.issn1212-3609
dc.identifier.orcid0000-0001-7124-9274 Anton, Sorin Gabriel
dc.identifier.orcid0000-0001-5420-5165 Afloarei Nucu, Anca Elena
dc.identifier.urihttps://dspace.tul.cz/handle/15240/153577
dc.language.isoen
dc.publisherTechnická Univerzita v Libercics
dc.publisherTechnical university of Liberec, Czech Republicen
dc.publisher.abbreviationTUL
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dc.relation.ispartofEkonomie a Managementcs
dc.relation.ispartofEconomics and Managementen
dc.relation.isrefereedtrue
dc.rightsCC BY-NC
dc.subjectcash holdingsen
dc.subjectemerging economyen
dc.subjectfirm valueen
dc.subjectfinancing constraintsen
dc.subjectfinancial crisisen
dc.subject.classificationG31
dc.subject.classificationG32
dc.titleFirm Value and Corporate Cash Holdings. Empirical Evidence from the Polish Listed Firmsen
dc.typeArticleen
local.accessopen
local.citation.epage134
local.citation.spage121
local.facultyFaculty of Economics
local.filenameEM_3_2019_08
local.fulltextyes
local.relation.abbreviationE+Mcs
local.relation.abbreviationE&Men
local.relation.issue3
local.relation.volume22
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