Determinants of Corporate Cash Holding a Moderating Role of Corporate Governance

Abstract

The study examines the determinants of corporate cash holdings a moderating role of corporate governance. The first objective to examine the determinants of cash holding. this study based on some theories trade off theory ,pecking order theory. results are support by Opler et al ( 1995) says in Pakistan mostly companies are more responsive to the volatility of cash flow and they prefer to hold more cash for unexpected events . Used sample size 35 non financial firms collected over the period of9 year (2010- 2019) fixed effect model is used to analyze the impact of given variables over cash holdings \\·ith corporate go\·emance as moderator. Dependent variable include corporate cash holding used proxy (cash ratio), independent variables dividend (dividend payout ratio of firm), firm size proxied by (Log of total assets), net working capital proxied (current assets - current liabilities), moderating variable include corporate governance used proxy (number of board of directors ). This study is based on two steps in first step model is applied on the collected data where results shows dividend payout ratio. sale growth , networking capital, firm size positively and significantly impacts on corporate cash holdings. Moderating variable corporate governance is also positively and significantly related to corporate cash holding. In second step model is analyzed for each variable