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 547
- Downloads 35
FINANCIAL ANALYSIS OF WAQF REAL ESTATE REVENUES IN THE WEST BANK: 1994-2014
This paper made a financial analysis of the revenues of the Palestinian Ministry of Waqf ( endowment ) and specifically its real estate revenues in the West Bank. It was found that 61% of the waqf ministry?s total reven...
Economics and Business Department at Colorado College, 14 East Cache la Poudre, Colorado Springs
This paper aims to evaluate the impact of a microlending program on ameliorating measured poverty within its client population, with the aim of improving that impact. We analyze over 18,000 women micro-finance clients o...
DIGITIZATION: ITS IMPACT ON ECONOMIC DEVELOPMENT & TRADE “WITH SPECIAL REFERENCE TO SERVICES AND MSME SECTOR OF INDIA”
This study discusses the impact of digitisation on India?s two most vibrant and high potential segments for future growth: services sector and MSME segments. We find that there is a significant rise in growth rate for t...
ECONOMIC GROWTH OF SELECTED SOUTH ASIAN COUNTRIES: DOES INSTITUTION MATTER?
In this paper we estimate the proximate determinants of economic growth in four major economies of South Asia with special emphasis on the role of institutions in conjunction with stock of physical capital, human capital...
PRIVATISING SOCIALLY OWNED ENTERPRISES, THE CASE OF KOSOVO
This paper aims at analyzing activities, and some of the causes of economic expansion of Kosovo?s economy, mainly focused in stage of initial establishment of the private sector in Kosovo. The purpose of the paper is to...