Determinants of corporate cash holdings in South Africa

Ewa Karwowski, Hanna Szymborska, Keagile Lesame and Tlhologelo Thoka

No wp-2022-85, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Globally, corporate cash holdings have risen since the 1980s. In South Africa, some commentators have accused corporations of engaging in an 'investment strike', while others see corporate liquidity as a precaution against systemic uncertainty. We use the unique South African Revenue Service/National Treasury firm-level dataset to scrutinize corporate liquidity, using panel analysis. Relative to GDP, corporate cash and liquidity holdings have not increased between 2010 and 2017. However, corporate cash is high in international comparison and has grown at the firm level.

Keywords: South Africa; Corporate finance; Cash holdings; Liquidity; Panel analysis; Domestic savings (search for similar items in EconPapers)
Date: 2022
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