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Cash and profit efficient in Malaysia and South Korea listed company using non-parametric DEA method and parametric regression method

A corporate cash holding is significant element in the cash and liquidity management. Corporations with higher excessive cash reserves will benefit when high liquidity makes it easier for managers to transfer funds among several of the corporations’ expenses and debts, and allows for more flexibilit...

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Main Authors: Soh, Wei Ni, Md Nassir, Annuar, Cheng, Fan Fah
Format: Article
Language:English
Published: Faculty of Economics and Management, Universiti Putra Malaysia 2018
Online Access:http://psasir.upm.edu.my/id/eprint/22657/1/30%29%20Cash%20and%20Profit%20Efficient.pdf
http://psasir.upm.edu.my/id/eprint/22657/
http://www.ijem.upm.edu.my/vol12_noS2/30)%20Cash%20and%20Profit%20Efficient.pdf
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spelling my.upm.eprints.226572019-11-12T07:33:05Z http://psasir.upm.edu.my/id/eprint/22657/ Cash and profit efficient in Malaysia and South Korea listed company using non-parametric DEA method and parametric regression method Soh, Wei Ni Md Nassir, Annuar Cheng, Fan Fah A corporate cash holding is significant element in the cash and liquidity management. Corporations with higher excessive cash reserves will benefit when high liquidity makes it easier for managers to transfer funds among several of the corporations’ expenses and debts, and allows for more flexibility in managing daily operational activities. However, it raise some issue as firm with higher cash holdings tend to explore to higher agency cost due to the conflict of interest between ownership and management. This study employs data envelopment analysis (DEA) estimation and two-stage regressions model. The findings conclude that the firm size, firm growth, and gross domestic product (GDP) are statistically significant for firm efficiency in both markets. The cash holdings help improve firm efficiency as the adjusted R-square is significantly increased for all models. However, the cash holdings are not related to the efficiency of high-cash holding firms for these two stock exchanges. The contribution of cash holdings to firm efficiency is higher, and even double for a developed market compared with a developing market (Bursa Malaysia), which shows that the development stage of a country impacts on cash holdings’ contribution to firm efficiency. Faculty of Economics and Management, Universiti Putra Malaysia 2018 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/22657/1/30%29%20Cash%20and%20Profit%20Efficient.pdf Soh, Wei Ni and Md Nassir, Annuar and Cheng, Fan Fah (2018) Cash and profit efficient in Malaysia and South Korea listed company using non-parametric DEA method and parametric regression method. International Journal of Economics and Management, 12 (spec. 2). pp. 711-729. ISSN 1823-836X; ESSN: 2600-9390 http://www.ijem.upm.edu.my/vol12_noS2/30)%20Cash%20and%20Profit%20Efficient.pdf
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description A corporate cash holding is significant element in the cash and liquidity management. Corporations with higher excessive cash reserves will benefit when high liquidity makes it easier for managers to transfer funds among several of the corporations’ expenses and debts, and allows for more flexibility in managing daily operational activities. However, it raise some issue as firm with higher cash holdings tend to explore to higher agency cost due to the conflict of interest between ownership and management. This study employs data envelopment analysis (DEA) estimation and two-stage regressions model. The findings conclude that the firm size, firm growth, and gross domestic product (GDP) are statistically significant for firm efficiency in both markets. The cash holdings help improve firm efficiency as the adjusted R-square is significantly increased for all models. However, the cash holdings are not related to the efficiency of high-cash holding firms for these two stock exchanges. The contribution of cash holdings to firm efficiency is higher, and even double for a developed market compared with a developing market (Bursa Malaysia), which shows that the development stage of a country impacts on cash holdings’ contribution to firm efficiency.
format Article
author Soh, Wei Ni
Md Nassir, Annuar
Cheng, Fan Fah
spellingShingle Soh, Wei Ni
Md Nassir, Annuar
Cheng, Fan Fah
Cash and profit efficient in Malaysia and South Korea listed company using non-parametric DEA method and parametric regression method
author_facet Soh, Wei Ni
Md Nassir, Annuar
Cheng, Fan Fah
author_sort Soh, Wei Ni
title Cash and profit efficient in Malaysia and South Korea listed company using non-parametric DEA method and parametric regression method
title_short Cash and profit efficient in Malaysia and South Korea listed company using non-parametric DEA method and parametric regression method
title_full Cash and profit efficient in Malaysia and South Korea listed company using non-parametric DEA method and parametric regression method
title_fullStr Cash and profit efficient in Malaysia and South Korea listed company using non-parametric DEA method and parametric regression method
title_full_unstemmed Cash and profit efficient in Malaysia and South Korea listed company using non-parametric DEA method and parametric regression method
title_sort cash and profit efficient in malaysia and south korea listed company using non-parametric dea method and parametric regression method
publisher Faculty of Economics and Management, Universiti Putra Malaysia
publishDate 2018
url http://psasir.upm.edu.my/id/eprint/22657/1/30%29%20Cash%20and%20Profit%20Efficient.pdf
http://psasir.upm.edu.my/id/eprint/22657/
http://www.ijem.upm.edu.my/vol12_noS2/30)%20Cash%20and%20Profit%20Efficient.pdf
_version_ 1651869024561135616
score 13.211869

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