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Do Group Affiliated And Unaffiliated Firms Hold Cash Differently? The Case Of Pakistan

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  • Ishtiaq Ahmad

    (University of Debrecen, Hungary)

Abstract

This study analyses the effect of business group membership on cash holding pattern of affiliated firms listed at Pakistan Stock Exchange from 2009-2014. Group affiliation can increase benefits for affiliated firms by providing an access to internal capital markets, particularly in emerging economies where institutional control is weak and access to external financing is difficult and expensive. Using panel data of public limited group affiliated firms and comparable standalone firms, the empirical results show that group firms hold less cash than standalone firms. The results are in line with the view that access to internal capital markets enables group affiliated firms to manage their operations with low cash reserves.

Suggested Citation

  • Ishtiaq Ahmad, 2017. "Do Group Affiliated And Unaffiliated Firms Hold Cash Differently? The Case Of Pakistan," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 373-384, July.
    • Handle: RePEc:ora:journl:v:1:y:2017:i:1:p:373-384
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    More about this item

    Keywords

    Group affiliation; cash holdings; affiliated firms;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • 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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