Insights from Corporate Cash Holdings in Emerging Markets

Guler Aras and Ozlem Kutlu Furtuna

Corporate savings has become a significant issue in contemporary international debates. Several studies have stressed the pros and cons of corporate cash holding in developed countries. As for the developing countries, the literature for the topic is scarce which contradicts to the significance of the topic due to the growing economic activities of Brazil, Russia, India and China (BRIC) and Turkey. This study proposes to highlight this issue for firms operating in BRIC countries and Turkey by determining corporate cash holding across different firm sizes and industries. The sample contains 5.840 firm-year observations across these countries for the period 2005–2014. Findings provide support for the notion that related firms is under financial constraint and propose to hold more cash within precautionary motive for cash management.

DOI : https://doi.org/10.21102/graf.2017.03.81.08