Search results

This paper provides new evidence on Indian tourism firms by investigating the role of a firm's financial conditions typified by its leverage, earnings, size, cash holdings, and excess cash in moderating the pandemic-led idiosyncratic volatility in its stock prices.

The authors employ a firm-level panel comprising 82 publicly-listed tourism firms from India. Firm risk is estimated for the period beginning January 2020 to December 2020.

This paper finds non-linear effects of the pandemic on the idiosyncratic risk of the sample firms. Precisely, stock price volatility rises, but as the market absorbs this information, volatility subsides even as the disease spreads further. Further, lower levels of past debt and earnings and higher cash holdings ameliorate the pandemic's effects on tourism firms' risk. Contrasting the view that “excess” cash reflects poor operational performance, we show that “excess” cash firms are better prepared to face the adverse effects of the pandemic.

This study’s sample period fully encompasses the first wave of the pandemic (January–December 2020) of the novel coronavirus infection spread.

To the best of the authors’ knowledge, this is the first study to assess the moderating effects of company fundamentals on the risk of Indian tourism firms. In doing so, the authors account for non-linear effects of the pandemic on firms' idiosyncratic volatility over time.

The purpose of the study is to examine factors influencing cash holding of firms during periods of crisis. In recent times, the level of cash holdings in firms has seen a steady rise across industries for diverse reasons. However, the need to study cash holding becomes even more compelling during geopolitical instability as it causes firms to hold greater cash reserves for precautionary reasons.

This paper systematically reviews literature from 1984 to 2024 by organising the findings thematically based on the relationship between corporate cash holdings (CCH) and firm performance in times of war. The paper used 47 research articles from the Scopus database and Google Scholar. Literature connected to CCH, firm performance and war times was explored. The title and abstract analysis were conducted using VOSviewer software. As a result, the predetermined body of literature was visualised, and six theme-based clusters were identified.

This paper systematically reviews empirical studies, categorising them into six theme-based groups. These clusters encompass CCH and Determinants, Optimal Cash Holding Levels, Cash Holding Adjustment Speed and Theory, Cash Holding and Firm Value, Cash Holding and Firm Performance, Cash Holding in the Context of the Ukraine War and the adaptive financial strategies of firms in response to economic conditions by using cash holding as a hedging instrument. Inflation prompts adjustments in cash-holding strategies at a macro level. During crises, lower interest rates lead to increased cash holdings. Various motives influence firms’ cash-to-assets ratios. According to the pecking order theory, geopolitical risk negatively affects cash holdings. Exposure to pandemics prompts an increase in cash reserves. War shocks have a profound impact on economies, markets and stability; hence, geographic diversification can reduce the need for precautionary cash. In times of uncertainty, the financial stress of firms can get elevated, and therefore, having a well-diversified geographical portfolio of a firm’s investments can aid in meeting any financially distressing situation.

The literature on CCH has been phenomenal. This paper attempts to structure the issues surrounding cash holding and firm performance in wartime, like the Ukraine war, using the VOSviewer software. This study endeavours to highlight the reasons for cash holding during crises and understand how cash holding affects firm performance. Finally, this paper also tries to comprehend whether cash holding helps as a hedging instrument in times of war.

In today’s interconnected world, social capital has emerged as a crucial business competence, drawing significant attention in recent literature. Using social network analysis, this study aims to investigate the impact of network centrality, established by a firm through its board members (i.e. boardroom networks), on corporate cash holdings.

This study uses extensive panel data comprising 36,963 firm-year observations of firms listed on the Australian Securities Exchange, spanning a 22-year period (2001–2022). The study uses firm fixed-effect regression along with several alternative specifications and an instrumental variable approach to ensure the robustness of the results. Boardroom network centrality is quantified by five measures that capture different perspectives on networks as viable conduits for resource exchange and information flow: degree, two-step reach, closeness, eigenvector and betweenness.

The authors find evidence for the benefits of board networks. Firms with well-connected boards (central firms) are more likely to have smaller cash holdings. The findings also reveal distinct effects stemming from local and global properties of centrality, with local network measures playing a more pronounced role in shaping cash-holding decisions. Overall, the evidence reflects the ability of connected directors to enhance governance by limiting managerial discretion over cash reserves, thus reducing agency conflicts associated with cash holdings.

This study offers important insights for regulators, investors and practitioners, highlighting the potential for connected directors to effectively curtail managerial autonomy in deploying corporate cash holdings.

This study contributes to the ongoing discussion about the advantages and drawbacks of board networks, which constitute a vibrant and burgeoning area of research in the finance literature. It also complements scanty network-based studies on firm cash holdings. Importantly, this study extends prior work by providing robust evidence and a comprehensive analysis of the nuanced roles that board networks play in affecting the level of cash reserves.

This study aims to explore the moderating effects of strategy on the relationship between working capital management (WCM) and profitability.

A data sample of 72,444 firm-year observations of US-listed firms during 2000–2020 was used. The research hypotheses were tested using a panel regression analysis and an appropriate research instrument that signifies a firm’s strategic positioning.

The prospecting (defending) strategy has a decreasing (increasing) moderating effect on the relationship between WCM and profitability. The empirical findings are not affected by the level of earnings management, the presence of motives to meet earnings targets or the intensity of unreported intangible assets. Additionally, the reported empirical results remain robust within the context of propensity score matching regression analysis, in the presence of nonlinear effects of WCM on profitability, when alternative measures of WCM are used, and between firms with an increase or decrease in future profitability or different levels of efficiency on net WCM investments.

This study may stimulate future research exploring the moderating effects of various variables on the relationship between WCM and operating performance.

The findings highlight the importance of strategy for improving the performance evaluation of WCM policies and the prediction accuracy of the consequences of a strategy on short-term operating performance.

Prior empirical research has documented either a negative or positive relationship between WCM and profitability, which implies the presence of moderating effects of various factors. This study provides empirical evidence of the moderating effects of strategy on the relationship between WCM and profitability.

This study compares the motives of holding cash between developed (Australian) and developing (Malaysian) financial markets.

For the period 2006–2020, the t-test, fixed-effect and generalised method of moment (GMM) model have been applied to a sample of 1878 (1,165 Australian and 713 Malaysian) firms.

The empirical results reveal that firms in developed financial markets hold higher cash compared to the developing financial markets. The findings confirm that motives to hold cash differ between developed and developing financial markets. The GMM findings further show that cash holdings (CH) in Australia are higher due to higher ratios of cash flow, research and development (R&D) and return on assets (ROA), and lower due to larger dividend payments. In the Malaysian market, however, cash flows and R&D are ineffectual, ROA falls and dividend payments rise CH.

The study helps managers, practitioners and investors understand that firms' distinct economic, institutional, accounting and financial environments are important. To attain the desired outcomes, they must thus comprehend and consider these considerations while developing suitable liquidity strategies.

To the authors' best knowledge, this is the initial research demonstrating how varied cash motives and their ramifications are in developed and developing financial markets. Therefore, this study identifies the importance that CH motives varied among financial markets and that findings from a particular market cannot be generalised to other markets because of the market and financial structural variations.

This study aims to investigate the influence of economic policy uncertainty (EPU) and geopolitical risk (GPR) on the relationship between internal cash flow and external financing in an emerging market, Saudi Arabia. It also examines the role of asset tangibility and financial crisis in establishing this relationship.

The sample was taken from non-financial sector companies listed on the Saudi Stock Exchange between 2002 and 2019. The data were analyzed using panel data regression analysis, including ordinary least squares and fixed effects model. The author addresses potential endogeneity through the generalized method of moments.

This study found that both EPU and GPR reduce the sensitivity of external financing to internal cash flow. This implies that firms depend more on internally generated funds during periods of increased EPU and GPR. Besides, this study found that the influence of EPU and GPR on the sensitivity of external financing to internal cash flow is more (less) negative for more tangible firms (during the financial crisis period). This result implies that Saudi firms boasting a higher level of tangibility are more flexible when it comes to seeking external financing. However, the presence of uncertainty during the crisis period makes the external financing costly, and therefore, firms will be less likely to raise funds from external sources.

This study has important implications for managers, policymakers and regulators. First, the paper findings provide insights for corporate decision-makers in helping them to focus on internal funds to finance their investment during uncertain times. Second, the findings help managers to understand the role of asset tangibility in raising external funding when firms face financial constraints due to uncertainty. Third, this study also helps corporates to focus on internal funds to finance their investment during the crisis period because EPU and GPR increase the cost of external finance. Finally, the results provide guidelines for policymakers and regulators to make appropriate policy measures to increase the easy availability of external finance during periods of increased EPU and GPR.

This paper is the first to shed light on the impact of internal funds on external financing while paying close attention to the role of EPU and GPR.

Using imbalanced panel data of nonfinancial Vietnamese listed firms from 2005 to 2021, this paper explores the potential effect of ownership on firms' cash levels.

Two hypotheses are tested using different methods, including pooled ordinary least squares (POLS) and system-generalized method of moments (GMM), to investigate the ownership–cash holding relationship for various firm scenarios. Both book and market measures of the cash ratio are examined.

Results show that foreign and state ownership encourages firms to increase their cash reserves. The positive relationship between ownership and cash holding is, especially, pronounced for firms in the financial deficit.

This research suggests that in this emerging market, outside ownership substantially accelerates cash to hedge against the unexpected issues caused by poor investor protection, low political accountability and information asymmetry.

The study contributes to the existing understanding of the relationship between ownership and corporate cash holdings in the context of a typical emerging market. Besides, it expands the existing knowledge to the extent of such relations in the event of a financial shortage.

The present study reviews the literature on the history and evolution of investment strategies in the stock market for the period from 1900 to 2022. Conflicts and relationships arising from such diverse seminal studies have been identified to address the research gaps.

The studies for this review were identified and screened from electronic databases to compile a comprehensive list of 200 relevant studies for inclusion in this review and summarized for the cognizance of researchers.

The study finds a coherence to complex theoretical documentation of more than a century of evolution on investment strategy in stock markets, capturing the characteristics of time with a chronological study of events.

There were complications in locating unpublished studies leading to biases like publication bias, the reluctance of editors to publish studies, which do not reveal statistically significant differences, and English language bias.

Practitioners can refine investment strategies by incorporating behavioral finance insights and recognizing the influence of psychological biases. Strategies span value, growth, contrarian, or momentum indicators. Mitigating overconfidence bias supports effective risk management. Social media sentiment analysis facilitates real-time decision-making. Adapting to evolving market liquidity curbs volatility risks. Identifying biases guides investor education initiatives.

This paper is an original attempt to pictorially depict the seminal works in stock market investment strategies of more than a hundred years.

The reduction of government expenditure in the healthcare system, the difficulty of finding new sources of funding and the reduction in disposable income per capita are the most important problems of the healthcare system in Greece over the last decade. Therefore, studying the profitability of health structures is a crucial factor in making decisions about their solvency and corporate sustainability. The aim of this study is to investigate the effect of economic liquidity, debt and business size on profitability for the Greek general hospitals (GHs) during the period 2016–2018.

Financial statements (balance sheets and income statements) of 84 general hospitals (GHs), 52 public and 32 private, over a three-year period (2016–2018), were analyzed. Spearman’s Rs correlation was carried out on two samples.

The results revealed that there is a positive relationship between the investigated determinants (liquidity, size) and profitability for both public and private GHs. It was also shown that debt has a negative effect on profitability only for private GHs.

Increasing the turnover of private hospitals through interventions such as expanding private health insurance and adopting modern financial management techniques in public hospitals would have a positive effect both on profitability and the efficient use of limited resources.

These results, in conjunction with the findings of the low profitability of private hospitals and the excess liquidity of public hospitals, can shape the appropriate framework to guide hospital administrators and government policymakers.