HOW DO CORPORATE SUSTAINABILITY AND PANDEMIC AFFECT CASH HOLDINGS IN MUSLIM COUNTRIES?

We investigate how corporate sustainability (Environmental, Social, and Governance-ESG) influences cash holdings of non-financial firms in Muslim countries from 2003 to 2021.  Using panel models, we find that firms with lower ESG hold more cash over the entire period, which aligns with the agency an...

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Main Authors: Hasan Tekin, Huseyin Burgazoglu
Format: Article
Language:English
Published: Bank Indonesia 2022-12-01
Series:Journal of Islamic Monetary Economics and Finance
Subjects:
Online Access:https://jimf-bi.org/index.php/JIMF/article/view/1649
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author Hasan Tekin
Huseyin Burgazoglu
author_facet Hasan Tekin
Huseyin Burgazoglu
author_sort Hasan Tekin
collection DOAJ
description We investigate how corporate sustainability (Environmental, Social, and Governance-ESG) influences cash holdings of non-financial firms in Muslim countries from 2003 to 2021.  Using panel models, we find that firms with lower ESG hold more cash over the entire period, which aligns with the agency and precautionary motives of cash holdings. We also note that the negative relation between ESG and cash holding is not affected by the COVID-19 pandemic. Looking at individual countries in the sample, we note a positive relation between ESG and cash balances for Saudi Arabia. Meanwhile, similar to the full sample, their relation is negative for firms from Malaysia and Turkiye. Finally, the ESG and cash policies of firms in different industries tend to vary. Overall, firms in Muslim countries use cash holdings as a substitute for corporate sustainability without any changes in the COVID era.
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spelling doaj.art-d1d4f1bd240e4a889de58110f181d1ad2023-03-15T03:58:47ZengBank IndonesiaJournal of Islamic Monetary Economics and Finance2460-61462460-66182022-12-018461563610.21098/jimf.v8i4.16491649HOW DO CORPORATE SUSTAINABILITY AND PANDEMIC AFFECT CASH HOLDINGS IN MUSLIM COUNTRIES?Hasan Tekin0Huseyin Burgazoglu1Karabuk University, TurkeySakarya University, Sakarya Business School, TurkeyWe investigate how corporate sustainability (Environmental, Social, and Governance-ESG) influences cash holdings of non-financial firms in Muslim countries from 2003 to 2021.  Using panel models, we find that firms with lower ESG hold more cash over the entire period, which aligns with the agency and precautionary motives of cash holdings. We also note that the negative relation between ESG and cash holding is not affected by the COVID-19 pandemic. Looking at individual countries in the sample, we note a positive relation between ESG and cash balances for Saudi Arabia. Meanwhile, similar to the full sample, their relation is negative for firms from Malaysia and Turkiye. Finally, the ESG and cash policies of firms in different industries tend to vary. Overall, firms in Muslim countries use cash holdings as a substitute for corporate sustainability without any changes in the COVID era.https://jimf-bi.org/index.php/JIMF/article/view/1649cash management, covid, disclosure, esg, islamic.
spellingShingle Hasan Tekin
Huseyin Burgazoglu
HOW DO CORPORATE SUSTAINABILITY AND PANDEMIC AFFECT CASH HOLDINGS IN MUSLIM COUNTRIES?
Journal of Islamic Monetary Economics and Finance
cash management, covid, disclosure, esg, islamic.
title HOW DO CORPORATE SUSTAINABILITY AND PANDEMIC AFFECT CASH HOLDINGS IN MUSLIM COUNTRIES?
title_full HOW DO CORPORATE SUSTAINABILITY AND PANDEMIC AFFECT CASH HOLDINGS IN MUSLIM COUNTRIES?
title_fullStr HOW DO CORPORATE SUSTAINABILITY AND PANDEMIC AFFECT CASH HOLDINGS IN MUSLIM COUNTRIES?
title_full_unstemmed HOW DO CORPORATE SUSTAINABILITY AND PANDEMIC AFFECT CASH HOLDINGS IN MUSLIM COUNTRIES?
title_short HOW DO CORPORATE SUSTAINABILITY AND PANDEMIC AFFECT CASH HOLDINGS IN MUSLIM COUNTRIES?
title_sort how do corporate sustainability and pandemic affect cash holdings in muslim countries
topic cash management, covid, disclosure, esg, islamic.
url https://jimf-bi.org/index.php/JIMF/article/view/1649
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