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Inflation and cash holdings 2008-2018 in Indonesia Source: www.idx.co.id, www.bi.go.id
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One of the motives of a business doing cash holdings is the precautionary motive. The company tries to accumulate cash as a precautionary measure to cover unanticipated future necessities. We investigate to determine the factors that can affect company cash holdings that are associated with the characteristics of the industrial business cycle in In...
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... www.idx.co.id, www.bi.go.id At the time of the global financial crisis in 2008, the tendency for companies to have cash holdings was relatively small compared to inflation ( Figure 1). Several studies have examined the effects of the 2008-2009 financial crisis in the U.S. on corporate cash holdings. ...
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Citations
... Indonesian firms' size is not associated with cash holding since it is shown to be not significant (Diaw, 2021;Ferreira & Vilela, 2004;Sari et al., 2019). Mitigating the difference, a robustness test is conducted in Table 6, reaffirming the insignificant result of firm size to cash holding. ...
This study examines the relationship between financial statement comparability, cash flow volatility, and capital expenditure on cash holding in Indonesia, a developing country with weak investor protection and high agency costs. By analyzing a panel dataset of 2,387 firm-year data of publicly listed Indonesian companies from 2009 to 2019 using random effect panel data regression, the research findings indicate that financial statement comparability has a positive impact on cash holding. On the other hand, capital expenditure shows a significant non-positive effect on cash holding. Interestingly, the volatility of cash flow does not have a significant influence on cash holding. These results suggest that having comparable financial statements helps address agency problems and encourages firms to prioritize internal capital for project financing. This study highlights the crucial role of financial statement comparability and internal capital in shaping cash holding behavior in the specific context of weak investor protection and high agency costs in developing countries like Indonesia. Resumo: Este estudo examina a relação entre a comparabilidade das demonstrações financeiras, a volatilidade do fluxo de caixa e o gasto de capital sobre a manutenção de caixa na Indonésia, um país em desenvolvimento com fraca proteção ao investidor e altos custos de agência. Ao analisar um conjunto de dados em painel de 2.387 dados de empresa-ano de empresas indonésias listadas publicamente de 2009 a 2019, utilizando regressão de dados em painel com efeitos aleatórios, os resultados da pesquisa indicam que a comparabilidade das demonstrações financeiras tem um impacto positivo na manutenção de caixa. Por outro lado, o gasto de capital mostra um efeito não positivo significativo na manutenção de caixa. Curiosamente, a volatilidade do fluxo de caixa não tem uma influência significativa na manutenção de caixa. Esses resultados sugerem que ter demonstrações financeiras comparáveis ajuda a abordar problemas de agência e incentiva as empresas a priorizar o capital interno para o financiamento de projetos. Este estudo destaca o papel crucial da comparabilidade das demonstrações financeiras e do capital interno na formação do comportamento de Financial statement comparability… 2/16 Gestão & Produção, 31, e4224, 2024 manutenção de caixa no contexto específico de fraca proteção ao investidor e altos custos de agência em países em desenvolvimento como a Indonésia. Palavras-chave: Comparabilidade das demonstrações financeiras; Manutenção de caixa; Volatilidade do fluxo de caixa; Despesas de capital.
... Indonesian firms' size is not associated with cash holding since it is shown to be not significant (Diaw, 2021;Ferreira & Vilela, 2004;Sari et al., 2019). Mitigating the difference, a robustness test is conducted in Table 6, reaffirming the insignificant result of firm size to cash holding. ...
This study examines the relationship between financial statement comparability, cash flow volatility, and capital expenditure on cash holding in Indonesia, a developing country with weak investor protection and high agency costs. By analyzing a panel dataset of 2,387 firm-year data of publicly listed Indonesian companies from 2009 to 2019 using random effect panel data regression, the research findings indicate that financial statement comparability has a positive impact on cash holding. On the other hand, capital expenditure shows a significant non-positive effect on cash holding. Interestingly, the volatility of cash flow does not have a significant influence on cash holding. These results suggest that having comparable financial statements helps address agency problems and encourages firms to prioritize internal capital for project financing. This study highlights the crucial role of financial statement comparability and internal capital in shaping cash holding behavior in the specific context of weak investor protection and high agency costs in developing countries like Indonesia.
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This study analyzed the effect of profitability, net working capital, cash conversion cycle, dividend policy, and leverage on cash holding in consumer goods industry companies’ period 2019-2021. Determining the optimal level of cash holding is essential for a company, as excessively high cash holding can result in missed investment opportunities and returns, while low cash holding can disrupt operational activities and debt default or bankruptcy. The sample in this study was taken using a purposive sampling method. The objects in this study are 20 consumer goods industry companies that were listed on the IDX consecutively during 2019-2021. Secondary financial report data was evaluated using multiple linear regression. The result of this research indicates that profitability (ROA), net working capital (NWC), and dividend policy (DPR) have a significant positive effect on cash holding, leverage (DTA) has a significant negative effect on cash holding, and cash conversion cycle (CCC) has no effect cash holding. According to the findings, profitability, net working capital, dividend policy, and leverage can be used as a point of reference to predict a company’s cash holding. We suggest the company more effectively and efficiently manage its assets to generate substantial profits and consequently optimize its cash holding. This study was conducted in the consumer goods industry sector, which had the greatest average level of cash holding. This research differs because it estimates cash holding by combining financial ratios primarily from an asset perspective and management policy (dividend policy). Keywords: Cash; Dividend; Leverage; Net Working Capital; Profitability
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National Energy Policy (KEN) and the Paris Agreement are a step in the energy transition in Indonesia towards the use of new and renewable energy. The government is committed to reducing greenhouse gas (GHG) emissions using new and renewable energy. Therefore, research related to the performance of mining sector companies is interesting because the performance of mining companies is one of the keys to the success of the government in implementing KEN. The method used in this research is descriptive quantitative through the application of panel data regression models to be able to analyze the characteristics of company CEOs in the mining sector. The result of the research is that the panel data model can provide an overview which is then analyzed for the relationship between CEO characteristics and company performance in the Indonesian mining sector. This study found that CEO's work experience and CEO's Strength and CEO's level of education did not significantly influence the performance of mining sector companies in Indonesia.
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