• Naveed Khan
  • Dr. Hamid Ullah
  • Yasmin Kausar
Keywords: Karachi Stock Exchange, Net working capital, Private Credit to GDP, Market Capitalization to GDP, Total Turnover to GDP


Corporate cash holding involves both trade-off and packing order for cost and benefit analysis. The purposes of this study is to investigate the determinants of cash holding for financial and non-financial firms listed at Pakistan Stock Exchange as KSE-100 index. This study takes secondary data of 74 non-financial firms and 14 financial for the period of 2013-2019. Moreover, this study take cash holding as dependent variables while determinants of cash holding are Leverage, Firm Size, Cash Flow to Assets, Net Working Capital, Investment in tangible and intangible assets, this study takes three control variables which are PV-GDP, MCAP-GDP, TV-GDP, based on the diagnostic test and recommendation of Hausman test, results of Random Effect Model reveled that, leverage has positive and insignificant effect on cash holding, firm size were found negative and significant, cash flow to assets were found positive and significant, investment in tangible and intangible assets has positive, negative significant and insignificant effect on cash holding, while NWC were found positive and insignificant, control variables were found positive but have insignificant effect on cash At last Dummy variables for comparison were added in model which shows that there exists significant difference between financial and non-financial firms for holding cash level, which suggest that on average both sectors hold different level of cash and cash equivalent. The findings of this study is aligned with trade-off and pecking order theory and previous researcher, moreover the findings of this study suggest that it will be beneficial for company manager, who could employ minimum debt level or use an optimum level of capital structure, in order to deviate the managerial conflict, such study is also benefited for shareholders, creditors and investors.

Author Biographies

Naveed Khan

MS-Scholar Department of Management Sciences, Islamia College Peshawar

Dr. Hamid Ullah

Assistant Professor, Department of Management Sciences, Islamia College Peshawar

Yasmin Kausar

MS-Scholar Department of Management Sciences, Islamia College Peshawar


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How to Cite
Khan, N., Ullah, D. H., & Kausar, Y. (2020). DETERMINANTS OF CASH HOLDING: EVIDENCE FROM FINANCIAL AND NON-FINANCIAL FIRMS LISTED ON PAKISTAN STOCK EXCHANGE. Journal of Business Strategies, 14(2), 82-103. Retrieved from