Cash Holdings and Corporate Performance: Evidence from Sri Lanka

International Journal of Accounting & Business Finance, Issue 1, 2017

11 Pages Posted: 16 Apr 2018

See all articles by Ratnam Vijayakumaran

Ratnam Vijayakumaran

University of Jaffna

Nagajeyakumarn Atchyuthan

University of Jaffna - Department of Financial Management

Date Written: August 2, 2017

Abstract

Recently, debate on corporate cash holdings has received greater attention in the corporate finance literature. Corporate finance theories provide competing hypotheses on the relationship between cash holdings and corporate performance. This study empirically examines the relationship between cash holdings and corporate performance using a sample of firms listed in the Colombo Stock Exchange (CSE) over the period 2011-2115. Controlling for unobserved heterogeneity and other firm characteristics, this study finds that cash holdings is positively related to firm performance.

Keywords: Cash Holdings, Corporate Performance, Information Asymmetry, Agency Conflicts, Sri Lanka

JEL Classification: D21, G32, L25, L60

Suggested Citation

Vijayakumaran, Ratnam and Atchyuthan, Nagajeyakumarn, Cash Holdings and Corporate Performance: Evidence from Sri Lanka (August 2, 2017). International Journal of Accounting & Business Finance, Issue 1, 2017, Available at SSRN: https://ssrn.com/abstract=3154918

Ratnam Vijayakumaran (Contact Author)

University of Jaffna ( email )

Thirunelvely
Jaffna, 40000
Sri Lanka

Nagajeyakumarn Atchyuthan

University of Jaffna - Department of Financial Management

29 Brown Rd
Kokuvil Eas, 40000
Sri Lanka

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