EFFECT OF FIRM DYNAMISM AND FIRM CHARACTERISTICS ON CASH HOLDING OF LISTED MANUFACTURING FIRMS IN NIGERIA
Journal Title: Gusau Journal of Accounting and Finance - Year 2020, Vol 1, Issue 2
Abstract
Cash holding decision is one of the most significant decisions taken by the financial managers of any manufacturing firms. The decision not only depends upon the theoretical view but also the firm–specific variables and Firm dynamism variables of the economy. This paper aims at shedding light on the empirical effect of Firm dynamism and firm characteristics on corporate cash holding. The population of the consist of 51 manufacturing firms listed on the Nigeria Stock Exchange, while the adjusted population of 35 firms was arrived based on availability of data. Correlational research design was adopted. The study was anchored on pecking order and resource dependence theory. Multiple regression was employed to analyse data extracted from annual report of selected manufacturing firms in Nigeria from the period of 2012 to 2019. The result of the findings shows that investment opportunity has positive and significant relationship with corporate cash holding. However, negative and significant relationship was found between female leadership, leverage and corporate cash holding. In line with the findings, the study therefore recommends that, to enhance the effectiveness of boards and the efficient use of cash, firms with fewer women on their corporate boards now should look to add more female directors to their boards. Managers should also rationally presume that a firm with high quick asset replacements, high debt, and equity expense should maintain lower cash holdings. If for the unusual object, a firm with high quick asset delegates, high debt, and equity expense has high cash holdings, this force is a flag of a potential agency conflict. Managers should avoid holding excessive cash reserves as this might attract scrutiny from the capital markets.
Authors and Affiliations
Ibrahim Lawal, Umar Farouk Abdulkarim, Sanni Olawale Nurudeen
Keywords
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- EP ID EP709192
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