Factors affecting Corporate Cash Holdings: A study of Non-financial Institutions Listed on the Ghana Stock Exchange.

Abstract

This article intended to investigate the determinates of cash holding of registered non-financial institutions (NFIs) on the Ghana Stock Exchange (GSE). The research used panel data obtained from the twenty-five enterprises, for the period 2012-2018. The article adopted the robust fixed effect regression technique to empirically find the determinates of cash holdings. The research findings indicated an adverse nexus between cash holdings and capital structure. The profitability of the enterprise shown a positive and significant affiliation with industry cash holdings. Similarly, the size of the firms exhibited statistically a significant connection with enterprise cash holdings. The interest rate and inflation rate both indicated a positive and negative link. The article results are of significant source for enterprises registered on the GSE market to make the proper decision on the volume of cash to hold

Keywords: Cash holdings, robust fixed effects, leverage, Non-financial institutions, profitability.

DOI: 10.7176/RJFA/11-18-18

Publication date:September 30^th 2020