An empirical study on the determinants of cash holdings

This study aims to investigate the relationship between cash holdings and its determinants, with a particular focus on corporate governance factors that have gained increasing importance in recent years, for Turkish companies. The study also examines the impact of the 2018-2023 period of economic uncertainty in Turkey on cash holdings. A comprehensive literature review on cash holding motives and theories was conducted for the study. The study utilizes a panel dataset created by compiling corporate governance data from the Public Disclosure Platform (KAP) with financial data from the year-end financial statements of non-financial companies listed on the BIST 100 index for the period 2009-2023. Cash holdings serve as the dependent variable, while cash flow, liquidity, size, leverage, investment, profitability, growth, institutional ownership, ownership identity, board size, female board members, independent board members, foreign board members, executive board members, and CEO=Chairman, serve as the independent variables. Fixed effects analysis and the generalized method of moments (GMM) are employed to investigate the relationship between the dependent and independent variables. The regression findings indicate that cash holdings increased significantly during the 2018-2023 period of economic uncertainty. Strong and significant relationships between corporate governance factors and cash holdings are identified, consistent with the literature. Additionally, the lagged value of the dependent variable in the GMM equation is found to have a greater impact on companies' cash holding levels than the other factors