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Corporate cash holdings through economic policy uncertainty: An Australian study

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  • Heeney, Luke
  • Yang, Shanelle
  • Chowdhury, Hasibul
  • Tan, Kelvin Jui Keng

Abstract

This paper replicates Duong et al. (2020) and extends their work to the Australian context. We find that economic policy uncertainty (EPU) is positively associated with corporate cash holdings in both the United States and Australia, supporting the findings of the original study. However, corporate cash holdings in Australia do not mitigate the negative effects of EPU on investment in the Australian context. This study builds on the evidence base for economic policy uncertainty's effect on corporate cash holdings and provides a novel study in the Australian context.

Suggested Citation

  • Heeney, Luke & Yang, Shanelle & Chowdhury, Hasibul & Tan, Kelvin Jui Keng, 2023. "Corporate cash holdings through economic policy uncertainty: An Australian study," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:pacfin:v:79:y:2023:i:c:s0927538x23000744
    DOI: 10.1016/j.pacfin.2023.102008
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    References listed on IDEAS

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    More about this item

    Keywords

    Cash holding; Economic policy uncertainty; Australian context;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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