Government Deficits and Corporate Liquidity
Journal Title: Asian Economic and Financial Review - Year 2012, Vol 2, Issue 1
Abstract
This study examines the relationship between government deficit and corporate liquidity (cash holdings). Using data of nonfinancial firms in Taiwan from 1981 to 2009, this study finds that corporate liquidity is lower when government deficit is higher. In addition, corporate liquidity is related with other macroeconomic conditions, such as inflation, short-term interest rate, and economic growth. More precisely, results indicate that inflation and interest rates have a negative impact on corporate liquidity that is aggravated when government deficit is higher. Economic growth has a positive impact on corporate liquidity, and such positive impact is weakened when government deficit is higher.
Authors and Affiliations
Naiwei Chen| Department of Finance, College of Management, National Chung Cheng University, Chiayi, Taiwan, Siting Yo| Operation Department, China Life Insurance Life Insurance, Taipei, Taiwan
Keywords
Related Articles
- EP ID EP1742
- DOI -
- Views 497
- Downloads 35
OIL PRICE AND EXCHANGE RATE IN MALAYSIA: A TIME-FREQUENCY ANALYSIS
The study analyzed the Granger-causal relationship in the time-frequency framework between return series of real oil price (ROP) and real effective exchange rate (REER) for Malaysia. In doing so, study relied on time-fre...
APPLICATION OF COMPUTED FINANCIAL RATIOS IN FRAUD DETECTION MODELLING: A STUDY OF SELECTED BANKS IN NIGERIA
The study examines the application of computed financial ratios in fraud detection modeling using existing Financial Ratio Models with a view to detecting their capabilities in application in Nigerian banking system. Dat...
MAINTAINING ORDER IN THE MICROFINANCE SECTOR IN GHANA
This study examines the processes of maintaining order in the microfinance sector, particularly, the processes of resolving disputes, the types and causes of disputes that arise between microfinance institutions, their c...
FINANCIAL DEVELOPMENT AND INVESTMENT AMOUNT NEXUS: A CASE STUDY OF TURKEY
The paper examines the relationship between financial development and investment amount in Turkey over the period of 1998:01-2015:02 by using Toda-Yamamoto method. Banking sector and stock market measures of financial de...
THE VOLATILITY STRUCTURE OF GLOBAL FINANCIAL MARKETS: A COMPARATIVE ANALYSIS
The study is basically an extension of the k-day Vol ratio analysis on Nifty Index, proposed by Viswanathan and Maheswaran (2016). It examines the impact of the global financial crisis of 2008 on the structure of volatil...