Impact of macroeconomic performance on corporate cash holdings of selected Philippine Stock Exchange listed service firms

Date of Publication

2015

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Commerce Major in Management of Financial Institutions

Subject Categories

Finance and Financial Management

College

Ramon V. Del Rosario College of Business

Department/Unit

Financial Management

Thesis Adviser

Edralin C. Lim

Defense Panel Member

Patrick Caoile
Michael Manalang
Erwin I. Vobora

Abstract/Summary

Ever since the 2007 global financial crisis, firms have been more conservative with cash holdings knowing that having inadequate liquid assets is one of the primary reasons for recessions and financial market collapses. To cope with this, numerous studies have focused on finding microeconomic characteristics that affect corporate cash holdings (CCH) however, Abushammala and Sulaiman (2014) have proven that macroeconomic factors can also be significant indicators. Using data from 2003-2012 across 31 publicly listed service firms in the Philippines and FMOLS, we tested if GDP, credit spread, government budget deficit, inflation and cash surplus are significant factors affecting CCH. Our results show that only government budget deficit and cash significantly affect CCH. Therefore, having only these two macroeconomic factors as the signifant determinants, we found that the best way to control CCH is still through proper allocation of funds.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU21681

Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

66 leaves : illustrations

Keywords

Finance--Philippines; Recessions--Philippines; Cash management--Philippines

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