Corporate cash holdings through economic policy uncertainty: An Australian study

Abstract

This paper replicates Duong et al. (2020) and extends their work to the Australian context. We find that economic policy uncertainty (EPU) is positively associated with corporate cash holdings in both the United States and Australia, supporting the findings of the original study. However, corporate cash holdings in Australia do not mitigate the negative effects of EPU on investment in the Australian context. This study builds on the evidence base for economic policy uncertainty's effect on corporate cash holdings and provides a novel study in the Australian context.