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Geopolitical risk and corporate cash holdings in the shipping industry

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  • Kotcharin, Suntichai
  • Maneenop, Sakkakom

Abstract

We examine the cash holding decisions of global shipping firms in response to a change in geopolitical risk (GPR). Our results show that shipping companies significantly increase their cash reserves after GPR rises. The positive impact of GPR is more pronounced for firms with greater financial constraints. A further analysis shows that GPR positively and significantly affects dry bulk and container firms, but has an insignificant impact on tanker and logistics firms. We also find that GPR positively affects the corporate cash decisions of Asian listed shipping companies, but not those of other globally listed shipping companies. This study calls for policymakers to implement appropriate monetary and fiscal policies.

Suggested Citation

  • Kotcharin, Suntichai & Maneenop, Sakkakom, 2020. "Geopolitical risk and corporate cash holdings in the shipping industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    • Handle: RePEc:eee:transe:v:136:y:2020:i:c:s1366554519308816
    DOI: 10.1016/j.tre.2020.101862
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    6. Faheem Aslam & Paulo Ferreira & Haider Ali & Ana Ercília José, 2022. "Application of Multifractal Analysis in Estimating the Reaction of Energy Markets to Geopolitical Acts and Threats," Sustainability, MDPI, vol. 14(10), pages 1-23, May.
    7. Livingstone Divine Caesar, 2023. "Emerging Dynamics of Training, Recruiting and Retaining a Sustainable Maritime Workforce: A Skill Resilience Framework," Sustainability, MDPI, vol. 16(1), pages 1-20, December.
    8. Haque, Tariq & Pham, Thu Phuong & Yang, Jiaxin, 2023. "Geopolitical risk, financial constraints, and tax avoidance," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 88(C).
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    10. Lee, Chien-Chiang & Wang, Chih-Wei & Thinh, Bui Tien & Purnama, Muhammad Yusuf Indra, 2023. "Cash holdings and cash flows: Do oil price uncertainty and geopolitical risk matter?," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 134-152.
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