Research Aims This paper investigates the firm-level determinants of cash holdings by Indonesian ... more Research Aims This paper investigates the firm-level determinants of cash holdings by Indonesian firms. It also examines net debt as substitute measure for cash holding in firms’ financial policies. Design/Methodology/Approach With the sample comprising 483 Indonesian companies listed on the Indonesia stock exchange, multiple regression analysis is conducted on firms’ cash holdings and net debt as dependent variables and firm-level financial and other variables as independent variables. Research Findings The study finds that cash holding is the most relevant for financially-constrained firms and for growth firms. Net debt appears to be the most relevant element for low-growth firms. No-hedging firms are indifferent about their cash holdings and net debt. Theoretical Contribution/Originality This study establishes the validity of fact that more profitable firms generating sustainable cash flows are likely to hold more cash. Also, firms that face challenges in raising external capital...
Research Aims This paper investigates the firm-level determinants of cash holdings by Indonesian ... more Research Aims This paper investigates the firm-level determinants of cash holdings by Indonesian firms. It also examines net debt as substitute measure for cash holding in firms’ financial policies. Design/Methodology/Approach With the sample comprising 483 Indonesian companies listed on the Indonesia stock exchange, multiple regression analysis is conducted on firms’ cash holdings and net debt as dependent variables and firm-level financial and other variables as independent variables. Research Findings The study finds that cash holding is the most relevant for financially-constrained firms and for growth firms. Net debt appears to be the most relevant element for low-growth firms. No-hedging firms are indifferent about their cash holdings and net debt. Theoretical Contribution/Originality This study establishes the validity of fact that more profitable firms generating sustainable cash flows are likely to hold more cash. Also, firms that face challenges in raising external capital...
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