earticle

영어

The study on the subject of corporate cash holdings, is to identify any pronounced financial determinants on the cash holdings of the firms in the domestic capital markets. Specially, it focused on the regional firms with headquarters in Chungcheong province in the Republic of Korea, taking into account a scarcity of the previous literature on the subject which concentrated on the firms in the particular region. Therefore, any empirical findings as significant financial factors of corporate cash holding may contribute to searching for the optimal level of cash holdings, which, in turn, enhance the wealth of the firms' shareholders in the region. Three primary hypotheses were postulated and empirically tested by utilizing robust econometric estimations such and static panel data, Tobit regression, and logistic models: Concerning the first hypothesis test, only five explanatory variables such as DSO, LIQUID, LEVERAGE, PMARGIN, and SIZE, showed their statistically significant effects on the level of cash holdings at the 5% level amongst the total nine variables across the models employed. On the last hypothesis test, it was interesting to have identified that two IDVs such as LEVERAGE and FOS showed their significant power to discriminate between firms with headquarters in North and South Chungcheong regions. Given the continued debates among the interest parties on the optimal cash reserves among, the study may provide a new vision to search for the optimal corporate cash reserves for firms with headquarters in Chungcheong Province, where unprecedented dynamic factors are driven in terms of a socio-economic perspective.