Peer Effects on Corporate Cash Holdings: Evidence From Vietnam

Forthcoming, Asian Review of Finance Research

39 Pages Posted: 4 Aug 2021 Last revised: 24 Dec 2022

See all articles by Nghia Huu Nguyen

Nghia Huu Nguyen

National Central University - Department of Finance

Wei-Hsien Li

National Central University - Department of Finance

Date Written: January 27, 2022

Abstract

This research examines corporate cash holdings in Vietnam, an emerging market, and finds reverse peer effects on them - that is, a firm’s level of cash holdings negatively relates to those of its peers. We also note the reverse peer effects are stronger for firms facing less competition and with low intangibility. Because the Vietnam market has noticeably lower competition and investment in innovation than in developed economics like the U.S., our evidence supports the role of competition and innovation investment in driving cash holdings’ peer effects and complements the literature that mostly focuses on developed economies. Our findings also support heterogeneity across countries in peer mimicking behavior and contributes to the cash holdings literature for the Vietnam market.

Keywords: Cash Holdings, Peer Effects, Vietnam

JEL Classification: G30, G32, L10

Suggested Citation

Nguyen, Nghia Huu and Li, Wei-Hsien, Peer Effects on Corporate Cash Holdings: Evidence From Vietnam (January 27, 2022). Forthcoming, Asian Review of Finance Research, Available at SSRN: https://ssrn.com/abstract=3898248 or http://dx.doi.org/10.2139/ssrn.3898248

Nghia Huu Nguyen

National Central University - Department of Finance ( email )

No. 300, Jung-da Rd.
Jung-Li
Taoyuan
Taiwan

Wei-Hsien Li (Contact Author)

National Central University - Department of Finance ( email )

No. 300, Jung-da Rd.
Jung-Li
Taoyuan
Taiwan

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