Asymmetric targeting of corporate cash holdings and financial constraints in Pakistani firms

Purpose The purpose of this paper is to investigate the asymmetric adjustment of cash holdings in Pakistani firms for above and below target firms. Design/methodology/approach The study employs generalized method of moments (GMM) to...

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Tác giả chính:	Siddiqua, Ghulam Ayehsa, ur, Rehman Ajid, Hussain, Shahzad
Định dạng:	Bài trích
Ngôn ngữ:	English
Thông tin xuất bản:	University of Economics Ho Chi Minh City 2023
Truy cập trực tuyến:	https://www.emerald.com/insight/content/doi/10.1108/JABES-07-2018-0056/full/html http://scholar.dlu.edu.vn/thuvienso/handle/DLU123456789/115567
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spelling	dlu-DLU123456789-1155672023-03-08T04:10:09Z Asymmetric targeting of corporate cash holdings and financial constraints in Pakistani firms Siddiqua, Ghulam Ayehsa ur, Rehman Ajid Hussain, Shahzad Purpose The purpose of this paper is to investigate the asymmetric adjustment of cash holdings in Pakistani firms for above and below target firms. Design/methodology/approach The study employs generalized method of moments (GMM) to investigate the adjustment of cash holdings. Findings The study found that the firms which hold cash above the optimal level of cash holdings have higher speed of adjustment than the firms which hold cash below the optimal level. Financially constrained (FC) firms also adjust their cash holdings faster than financially unconstrained (FUC) firms but high speed of downward adjustment does not remain persistent after financial constraints are controlled. Findings of this study reveal this asymmetric adjustment in above and below target firms and extend these results in FC and FUC Pakistani listed firms, respectively. Research limitations/implications The conclusion of this study has been derived under certain limitations. There is a vast space to extend this study in different dimensions. Firms operating in capital-intensive industries may provide different results for financial constraints because their policy designing would be quite different from other firms. Originality/value This study contributes to cash holdings research in Pakistan by exploring the adjustment behavior of cash holdings across Pakistani non-financial firms using econometric modeling. Downward adjustment rate is supposed to be higher than upward adjustment rate and this rate is tested using dynamic panel data model. Similarly, it is inferred that this relationship holds for above target firms even after including the financial constraints in the presented model. 2023-03-08T04:10:09Z 2023-03-08T04:10:09Z 2019 Article 2515-964X https://www.emerald.com/insight/content/doi/10.1108/JABES-07-2018-0056/full/html http://scholar.dlu.edu.vn/thuvienso/handle/DLU123456789/115567 10.1108/JABES-07-2018-0056 en Journal of Asian Business and Economic Studies, Volume 26, Issue 1; p. 76-97 application/pdf University of Economics Ho Chi Minh City
institution	Trường Đại học Đà Lạt
collection	DSpace
language	English
description	Purpose The purpose of this paper is to investigate the asymmetric adjustment of cash holdings in Pakistani firms for above and below target firms. Design/methodology/approach The study employs generalized method of moments (GMM) to investigate the adjustment of cash holdings. Findings The study found that the firms which hold cash above the optimal level of cash holdings have higher speed of adjustment than the firms which hold cash below the optimal level. Financially constrained (FC) firms also adjust their cash holdings faster than financially unconstrained (FUC) firms but high speed of downward adjustment does not remain persistent after financial constraints are controlled. Findings of this study reveal this asymmetric adjustment in above and below target firms and extend these results in FC and FUC Pakistani listed firms, respectively. Research limitations/implications The conclusion of this study has been derived under certain limitations. There is a vast space to extend this study in different dimensions. Firms operating in capital-intensive industries may provide different results for financial constraints because their policy designing would be quite different from other firms. Originality/value This study contributes to cash holdings research in Pakistan by exploring the adjustment behavior of cash holdings across Pakistani non-financial firms using econometric modeling. Downward adjustment rate is supposed to be higher than upward adjustment rate and this rate is tested using dynamic panel data model. Similarly, it is inferred that this relationship holds for above target firms even after including the financial constraints in the presented model.
format	Article
author	Siddiqua, Ghulam Ayehsa ur, Rehman Ajid Hussain, Shahzad
spellingShingle	Siddiqua, Ghulam Ayehsa ur, Rehman Ajid Hussain, Shahzad Asymmetric targeting of corporate cash holdings and financial constraints in Pakistani firms
author_facet	Siddiqua, Ghulam Ayehsa ur, Rehman Ajid Hussain, Shahzad
author_sort	Siddiqua, Ghulam Ayehsa
title	Asymmetric targeting of corporate cash holdings and financial constraints in Pakistani firms
title_short	Asymmetric targeting of corporate cash holdings and financial constraints in Pakistani firms
title_full	Asymmetric targeting of corporate cash holdings and financial constraints in Pakistani firms
title_fullStr	Asymmetric targeting of corporate cash holdings and financial constraints in Pakistani firms
title_full_unstemmed	Asymmetric targeting of corporate cash holdings and financial constraints in Pakistani firms
title_sort	asymmetric targeting of corporate cash holdings and financial constraints in pakistani firms
publisher	University of Economics Ho Chi Minh City
publishDate	2023
url	https://www.emerald.com/insight/content/doi/10.1108/JABES-07-2018-0056/full/html http://scholar.dlu.edu.vn/thuvienso/handle/DLU123456789/115567
work_keys_str_mv	AT siddiquaghulamayehsa asymmetrictargetingofcorporatecashholdingsandfinancialconstraintsinpakistanifirms AT urrehmanajid asymmetrictargetingofcorporatecashholdingsandfinancialconstraintsinpakistanifirms AT hussainshahzad asymmetrictargetingofcorporatecashholdingsandfinancialconstraintsinpakistanifirms
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Asymmetric targeting of corporate cash holdings and financial constraints in Pakistani firms

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