What Determines Cash Holdings at Privately Held and Publicly Traded Firms? Evidence from 20 Emerging Markets

39 Pages Posted: 11 Nov 2013 Last revised: 1 Oct 2020

See all articles by Thomas W. Hall

Thomas W. Hall

Christopher Newport University

Cesario Mateus

Aalborg University

Irina B. Mateus

Aalborg University

Date Written: November 11, 2013

Abstract

We provide one of the first large sample study to examine how firm-level characteristics and national-level institutions affect cash balances in privately held and publicly traded firms and investigate whether the determinants of cash holdings for both types of firms are similar. Using panel analysis for data we analyze a sample of 9,453 private versus 7,319 public firms and 104,571 firm-year observations from Central and Eastern Europe over the period 2001-2010. We first show that privately held firms tend to hold more cash than publicly traded firms. Second, firms in more market-oriented countries, according to transition indicators, have larger cash reserves. Third, the same determinants of cash balances are relevant for both privately held and publicly traded firms regardless the stage in the transition to capitalism systems.

Keywords: Cash Holdings, Debt, Central and Eastern Europe

JEL Classification: G32

Suggested Citation

Hall, Thomas William and Mateus, Cesario and B. Mateus, Irina, What Determines Cash Holdings at Privately Held and Publicly Traded Firms? Evidence from 20 Emerging Markets (November 11, 2013). International Review of Financial Analysis, 2013, Available at SSRN: https://ssrn.com/abstract=2352937

Thomas William Hall

Christopher Newport University ( email )

United States

Cesario Mateus (Contact Author)

Aalborg University

Fredrik Bajers Vej 7E
Aalborg, DK-9220
Denmark

Irina B. Mateus

Aalborg University ( email )

Fredrik Bajers Vej 7E
Aalborg, DK-9220
Denmark

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