The Financial Determinants of Corporate Cash Holdings: An Empirical Examination of Tunisians Listed Firms

This study investigates cash holding behavior of Tunisian firms over the period of 2003-2013. We attempted to identify the different determinants of the corporate cash holding. We are focusing on the importance of cash flow, the effect of the leverage, other liquid assets, the ability to access to capital markets and the growth opportunities. Our results show that both trade off theory and pecking order theory are important to explain the determinants of cash holding of Tunisian companies. Generally, the results of our study support the tradeoff theory of cash holding. The motif of precaution and transaction are important in explaining the determinants of cash for Tunisian companies. Leverage, managerial ownership, growth opportunities, size, cash flow and liquid assets are important determinants of cash holding of Tunisian companies.