Title: The impact of systematic uncertainty on corporate cash holdings

Authors: Tarek Miloud

Addresses: Department of Accounting and Finance, INSEEC Business School, Lyon, France

Abstract: This paper aims at shedding light on the empirical relationship between cash holding and firm characteristics. We introduce a more detailed relationship between cash holdings and macroeconomic uncertainty. A sample of 387 French firms listed on Euronext Paris for a period of 15 years (from 2000 to 2015) was selected. Contrary to previous research that suppose a partial inclusion of macroeconomic uncertainty, this research considers a full impact of the macroeconomic uncertainty measured by difference macroeconomic condition variables. Empirical results show that macroeconomic uncertainties are significant and contribute to the change in cash holdings. Furthermore, results show that the firms' different level of exposure to macroeconomic uncertainty can cause the different degree of cash holdings and that firms with the higher level of exposure have the higher level of cash holdings. The study, therefore, contributes to the literature on the factors that determine the corporate cash holdings. The findings may be useful for the financial managers, investors, and financial management consultants.

Keywords: cash holdings; corporate governance; macroeconomic uncertainty; financial management; marginal value of cash.

DOI: 10.1504/EJIM.2022.126161

European Journal of International Management, 2022 Vol.18 No.4, pp.546 - 571

Received: 05 Jun 2018
Accepted: 08 Nov 2018
Published online: 14 Oct 2022 *

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