Advances and Applications in Statistics
Volume 62, Issue 2, Pages 173 - 184
(June 2020) http://dx.doi.org/10.17654/AS062020173 |
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CASH HOLDINGS OF CONSUMER GOODS COMPANIES: APPLYING GMM
Thu-Trang Thi Doan
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Abstract: The article examines the determinants of the cash holding ratio of consumer goods companies in Vietnam in the period of 2011-2018. The author has applied the methods of Pooled Regression (OLS), Fixed effects model (FEM), Random effects model (REM), followed by GMM (Generalized Method of Moment) method to ensure firm and effective estimation. The study results show the negative impact of financial leverage (LEV), firm size (SIZE) and cash conversion cycle (CCC) on the company’s cash holding ratio (CASH). In addition, the study also has found a positive impact of alternative liquidity assets (LIQ) on the cash holding ratio of consumer goods companies. The study results are a reliable basis to help managers in consumer goods companies in making cash-holding decisions. |
Keywords and phrases: profitability, commercial bank, GMM, Vietnam.
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