The impact of cash holding on market performance of listed firms in the Vietnamese stock market

Abstract

Using a sample of 650 listed firms on the Vietnamese stock exchange over the period 2007 to 2016, we examine the factors effect on the cash holding with employing the mixed model. The results find out leverage, state ownership, profit and firm age has a positive impact on cash holding level while leverage and size influence negatively on cash reserve. Furthermore, the dividend and the foreigners in board is insignificant with cash holding level. The findings have implications of cash management in the firms. Reference to the relationship between market performance and cash reserve level, this study investigates that the cash holding influences on market performance of listed firms. The findings will contribute to understand the factors impacting on the cash holding level as well as the important of cash management in improving the market performance of listed firms.