Cash, related to a firm’s profit and risk, is the most liquid asset in a firm. In the past, much of the literature focused on the link between cash holdings and corporate performance in listed companies, but those non-listed companies were rarely mentioned. The main purpose of this study aims to discuss and compare the determinants of corporate cash holdings and their impacts on performances of listed and non-listed companies.
The empirical results show that sales growth rate and size have significantly negative impacts on cash holdings in listed companies but significantly positive impacts on cash holdings in non-listed companies. These difference are both significant at the 1% level. Moreover, cash flow ratio, net working capital ratio, and research and development expenditure ratio have a greater positive impact on cash holding ratio in listed companies than in non-listed companies. Furthermore, cash flow risk and capital expenditure ratio have a greater negative impact on cash holding ratio in listed companies than in non-listed companies, whereas debt ratio and cash dividend payout have a greater negative impact on cash holding ratio in non-listed companies. Finally, we examine whether cash holding ratio and excess cash holding ratio affect corporate performance. The results indicate that both listed companies and non-listed companies with holding higher cash or excess cash can improve corporate performances. This positive impact is greater in listed companies than that in non-listed companies.
