Title: The relationship between firm financial distress, firm life cycle and firm cash holdings of non-financial listed Vietnamese companies

Authors: Nguyen-Quynh-Nhu Ngo; Minh-Dang Nguyen; Uyen-Nhi Do; Thi-Thuy-Hoa Nguyen

Addresses: Faculty of Finance and Banking, Ton Duc Thang University, Tan Phong Ward, District 7, Ho Chi Minh City, 70001, Vietnam ' Faculty of Business Administration, Ton Duc Thang University District 7, Ho Chi Minh City, Vietnam ' Faculty of Business Administration, Ton Duc Thang University District 7, Ho Chi Minh City, Vietnam ' Faculty of Business Administration, Ton Duc Thang University District 7, Ho Chi Minh City, Vietnam

Abstract: The body of research on the connection between cash holdings, financial trouble and the life cycle of a corporation is still ambiguous. Panel data and the generalised least squares (GLS) method have been used to explore the association between these parameters. We discover that businesses will hold less cash in the beginning phases and more cash as they move towards the mature stage. Financial trouble is more likely to affect businesses throughout their start-up and expansion phases than during their mature phase while companies in financial trouble will have less cash on hand. Moreover, across the life-cycle stages, there are significant differences between financial distress and the level of cash, including observed and target cash, target cash determinants and cash value. Our research adds to the body of knowledge on corporate governance, particularly in the areas of firm life cycle theory and corporate policy.

Keywords: cash holdings; firm life cycle; financial distress.

DOI: 10.1504/JIBED.2023.131468

Journal for International Business and Entrepreneurship Development, 2023 Vol.15 No.1, pp.29 - 60

Received: 03 Mar 2023
Accepted: 14 Mar 2023
Published online: 13 Jun 2023 *