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1 – 10 of over 52000This paper aims to explore the relationship between economic policy uncertainty (EPU) and promoters’ share pledging activity for real estate and construction firms in India. The…
Abstract
Purpose
This paper aims to explore the relationship between economic policy uncertainty (EPU) and promoters’ share pledging activity for real estate and construction firms in India. The author further divides the sample into financially sound and financially constrained firms and re-examines the relationship between EPU and promoters’ share pledging activity for them. Additionally, the author investigates the moderating effect of EPU on firm-level cash holding for pledged firms.
Design/methodology/approach
The author conducts multiple regression to examine the effect of EPU on the share-pledging activity of a firm on sample data of Indian construction and real estate firms. The financial and pledging data was collected for all listed firms from March 2009 to March 2020 from the Centre for Monitoring Indian Economy. The EPU data was re-estimated using the three-period moving average method. All data used in the study was collected from secondary sources.
Findings
The author finds that EPU influences pledging activity, and the association between them is opposite for financially constrained and financially sound firms. Also, the author reports that an increase in EPU increases firm-level cash holding for pledged firms, and the interaction between EPU and share pledging is significantly associated with firm-level cash holding.
Practical implications
The managerial implications of this study are manifold. Managers of financially constrained firms should pay attention to the promoters pledging activity so that in a rising EPU environment, issues of managerial entrenchment can be avoided. Moreover, any further promoters’ share pledging activity under rising EPU conditions may force managers to hoard higher cash and thus reducing investment and profitability.
Originality/value
This paper presents evidence of relationship between EPU, share pledging activity and firm-level cash holding in an emerging economy. The study also compares the response of financially constrained and financially sound firms for EPU on equity pledging activity and that of equity pledging on firm-level cash holdings.
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Neetu Kumar and Jacqueline Symss
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…
Abstract
Purpose
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.
Design/methodology/approach
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.
Findings
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.
Originality/value
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.
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Asyari Asyari, Mohammad Enamul Hoque, Perengki Susanto, Halima Begum, Awaluddin Awaluddin, Marwan Marwan and Abdullah Al Mamun
This study aims to explore the determinants that impact state Islamic University/Perguruan Tinggi Keagamaan Islam Negeri students’ intention to adopt online cash waqfs. In doing…
Abstract
Purpose
This study aims to explore the determinants that impact state Islamic University/Perguruan Tinggi Keagamaan Islam Negeri students’ intention to adopt online cash waqfs. In doing so, this study integrates knowledge of cash waqf and trust variables within the theory of planned behavior (TPB), allowing an examination of the mediating role of TPB variables and trust within the relationship between knowledge of cash waqf and intention for online cash waqf behavior.
Design/methodology/approach
To carry out an empirical analysis, the authors developed a well-structured questionnaire and distributed it to a group of students currently enrolled in PTKIN, obtaining 443 usable responses. The partial least squares-structural equation modeling (PLS-SEM) technique was used for the dual purposes of data analysis and hypothesis testing.
Findings
This study demonstrates that factors such as attitude, subjective norms, perceived behavioral control, trust and knowledge of cash waqf have a significant and favorable influence on the intention to donate through e-cash waqf. Knowledge of cash waqf impacts attitudes, subjective norms, perceived behavioral control and trust. The final analysis shows that attitude, subjective norms, perceived behavioral control and trust partially mediate the relationship between knowledge and intention in the online cash waqf context.
Practical implications
The aforementioned elucidates the paramount importance of trust in shaping individuals’ tendencies to engage in cash waqfs. The insights mentioned have the potential to be used by cash waqf establishments to promote transparency and accountability, ultimately bolstering the confidence of potential donors.
Originality/value
The concepts of waqf and the use of online cash waqf as a means of donation in developing countries are relatively new. In this study, the intention of students to adopt online cash waqf was predicted for the first time by considering their knowledge of cash waqf and their trust in online cash waqf transactions.
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This paper aims to explore the applicability of Systems Dynamics Methodology (SDM) to the formulation of long‐range cash flow policies. It also explains how the information…
Abstract
This paper aims to explore the applicability of Systems Dynamics Methodology (SDM) to the formulation of long‐range cash flow policies. It also explains how the information generated from the model aids in understanding the behaviour of cash flow through time and helps in determining cash deficits, excess cash, including timing, and the contruction of cash budgets under different cash control policies. After a brief introduction which explains the basic ideas behind SDM, the structure of the model is developed and described and the results of a hypothetical example analysed. This is followed by some comments on practical aspects of implementing the model in real life and its potential for cash flow planning and control.
We have to define “cash flow”; it is variously defined in different contexts. Techniques of accelerating the flow are described.
This paper aims to explore the applicability of Systems Dynamics Methodology (SDM) to the formulation of long‐range cash flow policies. It also explains how the information…
Abstract
This paper aims to explore the applicability of Systems Dynamics Methodology (SDM) to the formulation of long‐range cash flow policies. It also explains how the information generated from the model aids in understanding the behaviour of cashflow through time and helps in determining cash deficits, excess cash, including timing, and the contruction of cash budgets under different cash control policies. After a brief introduction which explains the basic ideas behind SDM, the structure of the model is developed and described and the results of a hypothetical example analysed. This is followed by some comments on practical aspects of implementing the model in real life and its potential for cash flow planning and control.
Many businesses are faced with liquidity problems for various reasons. This is especially true for small businesses, since most must operate with fewer sources of both short and…
Abstract
Many businesses are faced with liquidity problems for various reasons. This is especially true for small businesses, since most must operate with fewer sources of both short and long term financing than larger firms. Where less financing is available, more assets must be held in liquid form to meet daily transactions and emergency requirements. Larger firms, that have better access to both the money and capital markets, can afford to hold fewer current assets and meet cash requirements just as quickly and efficiently through borrowing.
There are several definitions of the concept of “cash flow” in the current financial literature. The article begins by reviewing the most recent definitions of cash flow. An arrow…
Abstract
There are several definitions of the concept of “cash flow” in the current financial literature. The article begins by reviewing the most recent definitions of cash flow. An arrow diagram, showing the flows in and out of the pool of corporate cash, has also been developed. The article then proceeds to examine techniques for accelerating the cash flow cycle, in particular the problem of accounts receivable collection. Indeed, the usual transfer time of payments in Europe varies from four to eighteen days, depending on the country of origin and the method of payment. This means that funds are permanently lost in “float” somewhere in the banking system. The amount of “float” results in an actual loss of working capital for the company. This illustrates the importance of techniques to increase the cash turnover. We limit ourselves to the more important techniques. Finally, we define and examine in detail the phenomenon “float”, a crucial concept in cash management.
Two stylized facts emerge from cash flow literature. One explores the link between free cash flow (FCF) to firm value (Jensen, 1986) and establishes that FCF increases firm value…
Abstract
Purpose
Two stylized facts emerge from cash flow literature. One explores the link between free cash flow (FCF) to firm value (Jensen, 1986) and establishes that FCF increases firm value. The other posits FCF may be value decreasing as firms tend to over invest when there is high level of FCF (Richardson, 2006). Two camps have opposing views yet together they establish that FCF is value relevant. If FCF or cash flow, in general, is value relevant then managers will be motivated to present forecasts to investors. The paper aims to discuss these issues.
Design/methodology/approach
The authors hand collect data from each firm’s press releases and earnings announcements and perform an event study around this date to see how firm forecast and disclosure policies affect firm value.
Findings
The analysis demonstrates that disclosures and forecasts do have significantly positive relation with tech firms suggesting that firms in the technology industries are more forthcoming with cash flow disclosures and forecasts in their earnings announcements. The authors further show that these disclosures and forecasts negatively affect the firm value of tech firms.
Originality/value
This paper contributes to the literature that there is empirical evidence that cash flow disclosures and forecasts matter to the value of the firm. Further, it posits that unlike understanding the existing views as opposing each other, may be the authors will be better served if they view both of them as right depending on the optimality of forecasts. The future efforts will be directed toward exploring the optimality of cash flow disclosures.
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Nasrollah Ahadiat and Misty Wright
Has two general objectives: to evaluate auto dealers′ current cashbudgeting practices, and to make an assessment of the potential forusing a computerized cash budgeting model – a…
Abstract
Has two general objectives: to evaluate auto dealers′ current cash budgeting practices, and to make an assessment of the potential for using a computerized cash budgeting model – a model which can have a great impact on the financial management of auto dealerships. However, a decision to utilize a computerized model is directly affected by the dealers′ current financial management practices, as well as attitudes and perceptions concerning computers and budgets. Analyses a sample of 500 automobile dealerships located throughout the USA using multiple regression and discriminant analysis. Results indicate that several specific variables are significant in auto dealerships′ cash planning and budgeting processes, including the level of used car inventory, dealers′ attitudes towards sales forecasts and the ability to predict economic conditions.
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