Proceedings of 8th Asian Business Research Conference
1 - 2 April 2013, Bangkok, Thailand, ISBN: 978-1-922069-20-7
The Value of Cash Holding and the Financial Crisis:
Evidence from Jordan
Tariq Alzoubi*
This research has investigated the effect of the recent financial crisis
on the value of cash holding among a sample of non-financial listed
firms from Jordan during the period from 2001 to 2011. Previous
researchers had studied the value of cash holding without considering
the effect of financial crisis. The results showed that cash is valued at
a discount in Jordan since the corporate governance system is weak,
investors have poor protection, and a free cash flow and agency
problem exist. As a result of the financial crisis, external financing has
become more difficult and expensive, which has caused the
shareholder in Jordan to value cash at a premium since the crisis.
Also, considering Jordan as a special setting, debt financing is less
preferred for religious reasons, which means that a higher level of
cash holding is considered positively related to firm value.
Field of Research: Finance.
Keywords: Cash Holding Value, Financial Crisis, Amman Stock Exchange.
*
PhD student, Economics and Finance Department, Brunel University, London, UK,
Email: tariq.alzoubi@gmail.com