Determinants of cash holdings: evidence from shariah-compliant firms in Malaysia
A firm that holds a higher level of cash may signify the presence of an agency conflict, as managers could use those resources based on their benefits and interests. Although previous studies discovered various factors that impact cash holdings, the literature on the findings for Shariah-Compliant F...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Islam Selangor
2024
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| Online Access: | http://psasir.upm.edu.my/id/eprint/116621/ http://psasir.upm.edu.my/id/eprint/116621/1/116621.pdf |
| _version_ | 1848867050844323840 |
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| author | Zainudin, Norlita Abdul Rahim, Norhuda Selamat, Aslam Izah Abdul Rahim, Ruzita |
| author_facet | Zainudin, Norlita Abdul Rahim, Norhuda Selamat, Aslam Izah Abdul Rahim, Ruzita |
| author_sort | Zainudin, Norlita |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | A firm that holds a higher level of cash may signify the presence of an agency conflict, as managers could use those resources based on their benefits and interests. Although previous studies discovered various factors that impact cash holdings, the literature on the findings for Shariah-Compliant Firms (SCFs) is still in its infancy. Hence, this study examines the determinants of cash holdings of SCFs listed in Bursa Malaysia to enrich the literature. The factors influencing corporate cash holdings are investigated using a static panel data regression. As the dataset has both firm fixed and time effects, this study further examines the robustness of the model by estimating standard errors clustered by firms while addressing the time effect. The results show that the significant determinants of cash holdings for SCFs are leverage, dividend, and cash flow. This result is robust using an alternative measurement of the dependent variable. Potential avenues for further research could involve investigating and contrasting the determinants of cash holdings between SCFs and Non-Shariah-Compliant Firms (NSCFs). |
| first_indexed | 2025-11-15T14:30:20Z |
| format | Article |
| id | upm-116621 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T14:30:20Z |
| publishDate | 2024 |
| publisher | Penerbit Universiti Islam Selangor |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-1166212025-04-14T03:42:30Z http://psasir.upm.edu.my/id/eprint/116621/ Determinants of cash holdings: evidence from shariah-compliant firms in Malaysia Zainudin, Norlita Abdul Rahim, Norhuda Selamat, Aslam Izah Abdul Rahim, Ruzita A firm that holds a higher level of cash may signify the presence of an agency conflict, as managers could use those resources based on their benefits and interests. Although previous studies discovered various factors that impact cash holdings, the literature on the findings for Shariah-Compliant Firms (SCFs) is still in its infancy. Hence, this study examines the determinants of cash holdings of SCFs listed in Bursa Malaysia to enrich the literature. The factors influencing corporate cash holdings are investigated using a static panel data regression. As the dataset has both firm fixed and time effects, this study further examines the robustness of the model by estimating standard errors clustered by firms while addressing the time effect. The results show that the significant determinants of cash holdings for SCFs are leverage, dividend, and cash flow. This result is robust using an alternative measurement of the dependent variable. Potential avenues for further research could involve investigating and contrasting the determinants of cash holdings between SCFs and Non-Shariah-Compliant Firms (NSCFs). Penerbit Universiti Islam Selangor 2024 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/116621/1/116621.pdf Zainudin, Norlita and Abdul Rahim, Norhuda and Selamat, Aslam Izah and Abdul Rahim, Ruzita (2024) Determinants of cash holdings: evidence from shariah-compliant firms in Malaysia. International Journal of Islamic Economics and Finance Research, 7 (2). pp. 1-18. ISSN 2636-9419 https://ijiefer.uis.edu.my/ircief/article/view/166 10.53840/ijiefer166 |
| spellingShingle | Zainudin, Norlita Abdul Rahim, Norhuda Selamat, Aslam Izah Abdul Rahim, Ruzita Determinants of cash holdings: evidence from shariah-compliant firms in Malaysia |
| title | Determinants of cash holdings: evidence from shariah-compliant firms in Malaysia |
| title_full | Determinants of cash holdings: evidence from shariah-compliant firms in Malaysia |
| title_fullStr | Determinants of cash holdings: evidence from shariah-compliant firms in Malaysia |
| title_full_unstemmed | Determinants of cash holdings: evidence from shariah-compliant firms in Malaysia |
| title_short | Determinants of cash holdings: evidence from shariah-compliant firms in Malaysia |
| title_sort | determinants of cash holdings: evidence from shariah-compliant firms in malaysia |
| url | http://psasir.upm.edu.my/id/eprint/116621/ http://psasir.upm.edu.my/id/eprint/116621/ http://psasir.upm.edu.my/id/eprint/116621/ http://psasir.upm.edu.my/id/eprint/116621/1/116621.pdf |