The study seeks to identify the joint effect of financial, operating, and governance features on the cash levels of retail firms listed in Vietnam. Instead of viewing the cash policy as a one-time decision that determines the cash balance, we model the cash level as a dynamic process where the current level is a function of past periods' cash level and speed of adjustments towards a target value. To test hypotheses empirically, we use a balanced panel of 38 listed retail firms in HOSE, HNX, and UPCOM from the period of 2020 to 2025, comprising 228 firm-year observations collected from their financial statements and official disclosures. The main equation is estimated with two-step system GMM approach, which takes into account Windmeijer-corrected standard errors, collapsed instruments, and limited lag depth to control for endogeneity. The coefficients imply considerable persistence in cash policies: the coefficient on lagged cash balance is 0.401, meaning that the annual adjustment speed is about 59.9%. Leverage, non-cash net working capital, ownership concentration, and dividends paid lower the cash balance, while profitability, growth in sales, days of inventories, volatility of cash flows, digitization, and independence of the board positively influence the cash balance. In an economic sense, the days of inventories, leverage, digitization, and cash flow volatility are the most influential variables for the long-run balance of cash. The study suggests the existence of cash management policy with target ranges per business segments, integration of the forecast by treasury with sales and inventories in real time, and governance in the process of using excess liquidity.
Tran DTT, Nguyen AT. The impact of institutional quality on firms cash holdings: evidence from an emerging market. Journal of International Economics and Management. 2025;25(3):216–30.
2.
Thai THA, Hoang MT. Does ownership matter in corporate cash holdings? Evidence from an emerging market. Journal of Economics and Development. 2024;26(2):123–38.
3.
Tran Minh HP, Nguyen Thi K, Thi Be LP. The non-linear impact of financial leverage on cash holdings: Empirical evidence from Vietnam. Cogent Business & Management. 2022;9(1).
4.
Ngo NQN, Nguyen MD, Do UN, Nguyen TTH. The relationship between firm financial distress, firm life cycle and firm cash holdings of non-financial listed Vietnamese companies. J for International Business and Entrepreneurship Development. 2023;15(1):29–60.
5.
Bui ND, Wang Y, Lee J. Payout policies, government ownership, and financial constraints: Evidence from Vietnam. International Review of Finance. 2022;22(4):600–36.
6.
Nguyen Thi QN, Tran QT, Doan HP. Foreign ownership, state ownership and cash holdings under the global financial crisis: evidence from the emerging market of Vietnam. International Journal of Emerging Markets. 2021;18(9):3354–69.
7.
Le AT, Nguyen Ha Phuong T. Climate Risk and Cash Holdings Adjustment Speeds: International Evidence. Elsevier BV; 2025.
8.
Bui Thu Hien, Dao Viet Bao Uyen, Luong Huyen Linh. Female directors and cash holdings: The case of Vietnam. VNU University of Economics and Business. 2024;4(4):43.
9.
Nam NHP, Tuyen TTM. Impact of liquidity on capital structure and financial performance of non-financial-listed companies in the vietnam stock market. Future Business Journal. 2024;10(1).
10.
Chireka T, Moloi T. Firm value, corporate cash holdings and the role of managerial ability. South African Journal of Business Management. 2024;55(1).
11.
Magerakis E, Tzelepis D. Corruption, cash holdings and firm performance: empirical evidence from an emerging market. Journal of Applied Accounting Research. 2022;24(3):483–507.
12.
Farooq U, Tabash MI, Mamadiyarov Z, Issa SS, Aldawsari SH. Sustainable financial strategies: the role of intellectual capital in shaping corporate cash holdings. International Journal of Organizational Analysis. 2025;1–19.
13.
Ahmed J, Tahir M. Corporate cash holdings and financial performance: moderating effect of corporate governance and family ownership. South Asian Journal of Business Studies. 2024;13(4):563–80.
14.
Guizani M, Ajmi AN. Do macroeconomic conditions affect corporate cash holdings and cash adjustment dynamics? Evidence from GCC countries. International Journal of Emerging Markets. 2021;18(9):2643–62.
15.
Alnori F, Bugshan A. Cash holdings and firm performance: empirical analysis from Shariah-compliant and conventional corporations. International Journal of Islamic and Middle Eastern Finance and Management. 2022;16(3):498–515.
16.
Legesse TS, Guo H, Wang Y, Tang J, Wu Z. The impact of economic policy uncertainty and financial development on the sensitivity of corporate cash holding to cash flows. Applied Economics. 2022;55(32):3728–46.
17.
Farooq U, Al-Gamrh B, Dai J. Green drives greenbacks: The impact of sustainable innovation on corporate cash holdings in BRICS nations. Journal of Cleaner Production. 2024;436:140533.
18.
Jiang Y, Mubarik MS, Zaman SI, Alam SH, Arif M. Corporate governance, cash holding, and firm performance in an emerging market. International Journal of Finance & Economics. 2023;29(3):2787–803.
19.
Farooq U, Yang Y, Xie H. Asymmetric effect of renewable and non-renewable energy consumptions on corporate cash holdings: new panel data evidence from BRICS economies. Kybernetes. 2023;53(11):4889–905.
20.
Zournatzidou G, Ragazou K, Sklavos G, Sariannidis N. Examining the Impact of Environmental, Social, and Corporate Governance Factors on Long-Term Financial Stability of the European Financial Institutions: Dynamic Panel Data Models with Fixed Effects. International Journal of Financial Studies. 2025;13(1):3.
The statements, opinions and data contained in the journal are solely those of the individual authors and contributors and not of the publisher and the editor(s). We stay neutral with regard to jurisdictional claims in published maps and institutional affiliations.
,
