Economic policy uncertainty and cash holdings: Evidence from BRIC countries

DEMİR E., Ersan O.

EMERGING MARKETS REVIEW, cilt.33, ss.189-200, 2017 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 33
  • Basım Tarihi: 2017
  • Doi Numarası: 10.1016/j.ememar.2017.08.001
  • Dergi Adı: EMERGING MARKETS REVIEW
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.189-200
  • İstanbul Teknik Üniversitesi Adresli: Evet

Özet

This paper examines the effect of Economic Policy Uncertainty (EPU) on cash holding decisions of firms in BRIC countries. Our focus is on the firms in BRIC countries, a particularly interesting group of countries to consider given their increasingly important role in the world economy. By using firm-level data through the 10 years period of 2006-2015, we find that firms prefer to hold more cash when uncertainty increases after controlling for firm level variables with industry and year fixed effects. The results are robust to alternative control variables, EPU calculations and selection of sub-samples. In addition to the country specific EPU levels, global EPU also has a significant positive impact on corporate cash holdings. (C) 2017 Published by Elsevier B.V.