The Factors Affecting Cash Holding Decisions of Manufacturing Share Companies in Ethiopia

International Journal of Advanced Research in Management and Social Sciences, Vol. 5 | No. 3 | March 2016

20 Pages Posted: 3 Jun 2019

See all articles by Enyew Alemaw Mesfin

Enyew Alemaw Mesfin

Wollo University, Department of Accounting and Finance

Date Written: March 12, 2016

Abstract

This study is aimed to investigate the firms’ specific and macroeconomic variables of cash holdings of manufacturing share companies in Ethiopia over the period from 2009 to 2014 inclusive. In doing so, a multiple linear regression model is used for 15 randomly selected manufacturing share companies of Ethiopia. The findings of the study revealed that growth opportunity, cash flows and firm size are statistically significant and positively affect the cash holding of the manufacturing share companies. On the other hand, net working capital, capital expenditure and inflation have negative and statistically significant impact on cash holdings. Besides this, the leverage, profitability and real gross domestic product are statistically insignificant variables of cash holding decision for Ethiopian manufacturing share companies.

Keywords: determinants, cash holding, manufacturing share companies, Ethiopia

Suggested Citation

Mesfin, Enyew Alemaw, The Factors Affecting Cash Holding Decisions of Manufacturing Share Companies in Ethiopia (March 12, 2016). International Journal of Advanced Research in Management and Social Sciences, Vol. 5 | No. 3 | March 2016, Available at SSRN: https://ssrn.com/abstract=3386930

Enyew Alemaw Mesfin (Contact Author)

Wollo University, Department of Accounting and Finance ( email )

Ethiopia

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