The impact of the global financial crisis on corporate cash holdings: Evidence from Eastern European countries

Billur Batuman, Yilmaz Yildiz, Mehmet Baha Karan

Research output: Contribution to journalArticlepeer-review

Abstract

This study investigates the impact of the global financial crisis on the determinants of corporate cash holdings and adjustments towards target cash levels using a sample of Eastern European firms. Employing panel fixed effects and GMM estimations, the results reveal that firm-level determinants of cash holdings significantly differ for pre- and post-crisis periods. Moreover, we find significantly lower adjustment speed to attain the optimal cash level in the post-crisis period. Our results are robust to correction for endogeneity. These results hold important implications for Eastern European firms, which are significantly afflicted by the global financial crisis in terms of liquidity shortage and limited financial flexibility.
Original languageEnglish
Number of pages10
JournalBorsa Istanbul Review
Early online date1 Nov 2021
DOIs
Publication statusE-pub ahead of print - 1 Nov 2021

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