Variable specification and expected impact of variables on cash holdings
| Variable | Formula | Expected sign of impact on cash holdings |
|---|---|---|
| DV | ||
| Cash ratio | Cash and cash equivalents | NA |
| IV | ||
| KZ index | Kaplan–Zingales index of financial constraints | “ + ” |
| Z-score | Altman Z-score of financial distress | “-” for normal time |
| Crisis | 1 for crisis time (2009, 2020), 0 otherwise | “ + ” |
| CVs | ||
| Size | Natural logarithm of total assets | “-” |
| Profitability | Operating profit to total assets (%) | “ + ” |
| Debt ratio | Total liabilities to total assets (%) | “-” |
| Asset turnover | Sales revenue to total assets (%) | “ + ” |
Regression analysis results with LnCash as DV and KZ index/Z-score as independent variable
| Whole period | Whole period | ||
|---|---|---|---|
| KZ index | 0.003 | Z-score | 0.024*** |
| Crisis | 0.025** | Crisis | 0.025** |
| Size | 0.817*** | Size | 0.819*** |
| Profitability | 0.041*** | Profitability | 0.041*** |
| Debt ratio | −0.013 | Debt ratio | X |
| Asset turnover | 0.055*** | Asset turnover | 0.056*** |
| R square | 0.669 | R square | 0.669 |
| F statistics | 1,479.041*** | F statistics | 1,778.564*** |
Descriptive statistics of variables (mean and median) in normal and crisis times
| Normal times | Crisis times | U Mann–Whitney test | |
|---|---|---|---|
| Cash ratio | 9.3 | 10.5 | −3.227*** |
| 5.7 | 7.1 | ||
| KZ index | 213.2 | 268.5 | −1.645* |
| 3.9 | 4.4 | ||
| Z-score | 7.5 | 7.2 | −0.849 |
| 7.0 | 7.0 | ||
| Profitability | 1.8 | 1.4 | −1.672* |
| 3.7 | 3.4 | ||
| Debt ratio | 50.3 | 51.9 | −0.939 |
| 49.2 | 50.2 | ||
| Asset turnover | 104.0 | 99.1 | −1.154 |
| 91.8 | 88.9 |
Descriptive statistics of the variables included in the research
| Variables | Mean | Median | Min | Max | SD |
|---|---|---|---|---|---|
| Cash ratio | 9.4 | 5.9 | 0.2 | 45.1 | 10.3 |
| KZ index | 220.8 | 4.0 | −120.2 | 6,615.9 | 1,043.7 |
| Z-score | 7.5 | 7.0 | −4.8 | 20.6 | 4.4 |
| Profitability | 1.8 | 3.7 | −5.0 | 31.5 | 14.7 |
| Debt ratio | 50.5 | 49.4 | 8.9 | 119.8 | 23.2 |
| Asset turnover | 103.3 | 91.4 | 8.4 | 340.5 | 76.6 |
Regression analysis results with the cash ratio as the DV and KZ index as the independent variable
| Whole period | Whole period | Whole period | Crisis time | Crisis time | Normal time | Normal time | |
|---|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | |
| KZ index | −0.072*** | −0.090*** | −0.032* | −0.046 | −0.003 | −0.078*** | −0.037* |
| Crisis | X | 0.044** | 0.050** | X | x | x | X |
| Size | X | X | −0.168*** | X | −0.126** | −0.175*** | |
| Profitability | X | X | 0.083*** | X | 0.050 | 0.088*** | |
| Debt ratio | X | X | −0.184*** | X | −0.148** | −0.191*** | |
| Asset turnover | X | X | 0.072*** | X | 0.085* | 0.070*** | |
| R square | 0.005 | 0.042 | 0.094 | 0.002 | 0.057 | 0.006 | 0.101 |
| F statistics | 22.975*** | 65.684*** | 76.763*** | 1.283 | 7.234*** | 23.257*** | 85.226*** |
Regression analysis results with cash ratio as DV and Z-score as independent variable
| Whole period | Whole period | Whole period | Crisis time | Crisis time | Normal time | Normal time | |
|---|---|---|---|---|---|---|---|
| 8 | 9 | 10 | 11 | 12 | 13 | 14 | |
| Z-score | 0.373*** | 0.372*** | 0.389*** | 0.338*** | 0.397*** | 0.381*** | 0.388*** |
| Crisis | X | 0.050*** | 0.053*** | X | X | x | X |
| Size | X | X | −0.114*** | X | −0.093* | −0.118*** | |
| Profitability | X | X | −0.055** | X | −0.121* | −0.044* | |
| Debt ratio | X | X | X | X | X | X | X |
| Asset turnover | X | X | 0.102*** | X | 0.110** | 0.101*** | |
| R square | 0.139 | 0.142 | 0.168 | 0.114 | 0.143 | 0.145 | 0.173 |
| F statistics | 713.217*** | 243.569*** | 179.212*** | 77.705*** | 24.926*** | 645.321*** | 198.399*** |