Abstract
The study selected 410 companies on Viet Nam’s Stock Exchange during the period from 2012 to 2016, with 2050 observations as a sample of research, to analyze the relationship between cash holdings and investment levels. The findings show that cash holdings has a positive effect on investment levels: the higher cash holdings, the greater investment level. Also, the results show that investment levels are affected by the return on total assets but not affected by the size of the company. The research is empirical evidence that contributes to the limited investment in research in Vietnam and is a reference for those interested in investing in Vietnam and managers in strategic policy formulation.
Highlights
Investment is indispensable in the process of business development, so investment-related issues have attracted the attention of scholars around the world
A summary of the descriptive statistics of the variables in the model is shown in Table 1 which indicates that the average value of the investment on fixed assets of Vietnamese enterprises in the sample is 0.7084%, which is in the range from -64.29% to 661.76%
The results show that there exists a relationship between cash holdings and investment level of Vietnamese enterprises that can be observed in the fixed-effects regression model (FEM), regression model (REM), and generalized least squares model (GLS) models, the coefficients are positive and statistically significant at 1%
Summary
Investment is indispensable in the process of business development, so investment-related issues have attracted the attention of scholars around the world. Corporate borrowing costs are higher than internal credit costs, domestic cash flow is not enough and enterprises will abandon the item with NPV> 0, the investment level of the business decreased, resulting from ineffective investment, investment activities are lacking. The article wants to find out the current state of investment of companies participating in the Vietnam securities market, clarifying the relationship between the cash holding ratio and the investment decision of the enterprise. It explains the factors such as the debt ratio, the size of the business, the time the company set up the enterprise, and the Return on total assets affect the firm's investment level, doesn’t it? The purpose is to improve the efficiency of investment activities of enterprises
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