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Determinants of cash holding in South Africa: evidence from non financial firms

Year: 2026

Type: article

Abstract: Cash holding is one of the most significant components of a firms current assets. The benefit of holding cash revolves around choosing the optimal timing of investment and avoiding under-price issues. This paper investigates the determinants of corporate cash holding of 80 non-financial firms in South Africa between 2007 and 2017. The Arellano-Bover/Blundell-Bond generalized method of moments (GMM) estimates indicate that leverage, firms growth opportunity, business confidence, economic growth and political stability have a negative effect on cash holdings, whereas debt maturity and cashflow exerts a positive influence. Other factors such as firm size, dividends payments, inflation rate and financial crises have an insignificant impact on company cash holdings.

Source: Human Science Research Council SA

DOI: 10.14749/32379261

Author: Human Sciences Research Council

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

Funder: Human Sciences Research Council

OpenAlex ID: W7162200347

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