Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92664
Authors: 
Horioka, Charles Yuji
Terada-Hagiwara, Akiko
Year of Publication: 
2013
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 889
Abstract: 
In this paper, we analyze the determinants of corporate saving in the form of changes in the stock of cash for 11 Asian economies using firm-level data from the Oriana Database for the 2002 - 2011 period. We find some evidence that cash flow has a positive impact on the change in the stock of cash, which suggests that Asian firms are borrowing constrained and that they save more when their cash flow increases so that they will be able to finance future investments. Moreover, we find in the developed economy sample that, as expected, cash flow has a positive impact on the change in the stock of cash only in the case of the smallest firms, which are more likely to be borrowing constrained, and find in the developing economy sample that, as expected, the positive impact of cash flow on the change in the stock of cash declines with firm size. In addition, we find that the cash flow sensitivity of cash declined after the global financial crisis. Finally, we find some evidence that Tobin's q has a positive impact on the change in the stock of cash.
Subjects: 
corporate saving
corporate investment
borrowing constraints
liquidity constraints
cash flow
cash holdings
cash flow sensitivity of cash
Tobin's q
firm size
productivity shocks
Asia
Oriana Database
financial sector development
global financial crisis
JEL: 
D92
E21
E22
G11
O53
Document Type: 
Working Paper

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