The study examines the impact of cash holdings on firm performance measured by return on total asset ROA and return on equity capital ROE. Using OLS, Fixed effect and GMM method to account for the endogeneity problem, the study shows the positive impact of cash holdings on the financial performance of listed companies in Vietnam during 2013- 2021. An increase in cash holding ratio helps businessed maintain solvency, creating resources for businesses to proactively take advantage of business opportunities, thereby improving the firm performance.
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Mạnh Hà Trần (2024) studied this question.
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