IDEAS home Printed from https://ideas.repec.org/a/mes/chinec/v51y2018i2p175-207.html
   My bibliography  Save this article

The Cash Holdings and Corporate Investment Surrounding Financial Crisis: The Cases of China and Taiwan

Author

Listed:
  • Huey-Ling Shiau
  • Yung-Ho Chang
  • Yi-Jing Yang

Abstract

The widely recognized 2007–2008 financial crisis has introduced observable shifts in cash holdings and corporate investment. We evaluate the effect of the financial crisis on cash holdings, corporate investment, and investment-cash flow sensitivity for China and Taiwan firms over the 2001–2014 period. We observe that in China and Taiwan firms increase equity financing and reduce capital expenditures to raise cash holdings after the crisis. The cash holdings for China firmsrises with operating earnings but declines with dividend payouts, and their working capital is upward overtime. On the contrary, the capital expenditures and working capital of the Taiwan firms becomes more conservative after the crisis. The empirical evidence suggests that corporate investment can be described by liquidity correlated to the state of the capital markets.

Suggested Citation

  • Huey-Ling Shiau & Yung-Ho Chang & Yi-Jing Yang, 2018. "The Cash Holdings and Corporate Investment Surrounding Financial Crisis: The Cases of China and Taiwan," Chinese Economy, Taylor & Francis Journals, vol. 51(2), pages 175-207, March.
    • Handle: RePEc:mes:chinec:v:51:y:2018:i:2:p:175-207
    DOI: 10.1080/10971475.2018.1447833
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10971475.2018.1447833
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10971475.2018.1447833?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ejaz Aslam & Khuram Mobusher Azam & Anam Iqbal, 2021. "The Risk Analysis of Ṣukūk: An Empirical Evidence from Pakistan تحليل مخاطر الصكوك: أدلة تجريبية من باكستان," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 34(1), pages 25-43, January.
    2. Khalil Jebran & Shihua Chen & Muhammad Zubair Tauni & Hassan Ahmad, 2019. "Corporate Governance, Ultimate Owner, and Target Cash Holdings: Evidence From China," SAGE Open, , vol. 9(4), pages 21582440198, December.
    3. Issal Haj-Salem & Khaled Hussainey, 2021. "Risk Disclosure and Corporate Cash Holdings," JRFM, MDPI, vol. 14(7), pages 1-15, July.
    4. Junkai Wang & Guanhua Liang, 2022. "Regional Investment Preferences and Corporate Cash Holdings: Evidence from China," Sustainability, MDPI, vol. 14(23), pages 1-16, November.
    5. Jianjun Sun & Nannan Zu & Zhifeng Liu, 2022. "The Trends and Gaps in the Sensitivity of Investment to Cash Flow: Evidence from China," Sustainability, MDPI, vol. 14(12), pages 1-26, June.
    6. Tran, Quoc Trung, 2021. "Economic policy uncertainty and cost of debt financing: International evidence," The North American Journal of Economics and Finance, Elsevier, vol. 57(C).
    7. Tran, Quoc Trung, 2020. "Financial crisis, shareholder protection and cash holdings," Research in International Business and Finance, Elsevier, vol. 52(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:chinec:v:51:y:2018:i:2:p:175-207. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MCES20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.