The Factors Affecting the Company\'s Cash Holding (Empirical Study of Listed Manufacturing Companies in Indonesia)

Abstract

The focus of this study is, discussing about the factors that affect cash holdings of manufacturing companies, listed on Indonesian Stock Exchange (IDX) in 2009-2016. The sample was determined by purposive sampling method and obtaining 107 sample firms. In this study, the test is conducted to examine whether capital expenditures, cash flow volatility, business group, dividend, firm size, growth opportunities, operating cash flow, and net working capital have significant effect on the company’s cash holdings. This study is classified as a causative research. This study is analyzed by using panel regression with estimation method of least square dummy variables (LSDV), which combines data having the effect of cross-section and time series. By using fixed effect model and a significance level of 5%, the result shows that, capital expenditure, dividend, growth opportunity, and net working capital significantly affect on cash holdings, while other variables have no significant effect.