IMPACT OF MACROECONOMIC PERFORMANCE ON CORPORATE CASH HOLDINGS: SOME EVIDENCES FROM JORDAN
Journal Title: Asian Economic and Financial Review - Year 2014, Vol 4, Issue 10
Abstract
The paper presents empirical evidences of macroeconomic determinants of cash holdings using panel data of 65 non-financial firms listed in ASE during the period from 2000 to 2011. The results of this study find a partial significant relationship between explanatory macroeconomic variables and corporate cash holdings. The corporate cash holdings related positively with gross domestic production (GDP), and credit spread (CS) as well as government budget deficit and cash (BD).While Inflation (INF) and cash surplus/deficit (SURP) do not determine cash holdings of the firms. This paper extends the existing liquidity literature around the world by using the Fully Modified Ordinary Least Square (FMOLS) method to find out the impact of macroeconomic variables on corporate cash holdings. Also this paper extends the existing liquidity literature the Middle East and Jordan by delivering the macroeconomic variables as a determinant of cash holdings, aside from the traditional firm-specific variables. Moreover, the results of this paper are expected to help the government decision makers, investors and firms? managers to understand the effects of macroeconomic variables and to hedge against the economic risks and take the right decisions insured the ongoing good performance of the firm.
Authors and Affiliations
Sami N. M. Abushammala| University College of Applied Sciences (UCAS), Gaza, Palestine, Jamalludin Sulaiman| School of Social Sciences, Universiti Sains Malaysia (USM), Pulau Pinang, Malaysia
Keywords
Related Articles
- EP ID EP2086
- DOI -
- Views 478
- Downloads 22
THE SUSTAINABILITY OF EXTERNAL ADJUSTMENT PROCESS IN TUNISIA: LESSONS FOR POST “ARAB SPRING” REVOLUTION POLICIES
This paper highlights one of the first attempts in the empirical studies. It shall examine the sustainability of external adjustment policy using a quantitative approach. Using intertemporel and consistency approaches of...
NONLINEAR EFFECTS OF THE FINANCIAL CRISIS ON ECONOMIC GROWTH IN ASIAN COUNTRIES: EMPIRICAL EVALUATION WITH A PSTR MODEL
The objective of this paper is to evaluate the effectiveness of fiscal policy in emerging countries in periods of crisis. We study the effect of fiscal policy on economic activity distinguishing between periods of recess...
EMPIRICAL TESTING OF EXCHANGE RATE AND INTEREST RATE TRANSMISSION CHANNELS IN CHINA
This paper examines the exchange rate and interest rate volatility transmission channels in China by applying Granger causality, Johansen cointegration, and the VAR model. Empirical results taken from the exchange rate c...
ELECTRONIC PAYMENT CHANNELS IN THE NIGERIA BANKING SECTOR AND ITS IMPACTS ON NATIONAL DEVELOPMENT
Electronic payment channels (EPC) are fast growing in Nigeria and are now the order of the day for effecting payments. These methods have brought a lot of convenience to both individual and corporate customers, unlike ma...
THE ANOMALY OF 28 DAYS BETWEEN THE EX-DIVIDEND AND PAYMENT DATES IN TAIWANESE STOCK MARKETS
After 16 years of suspension during the leadership of Steve Jobs, Apple now pays cash dividends. Since the death of Jobs, Apple has distributed twelve quarterly dividends. Of these, cash was paid 7 days after the ex-divi...