Firm Characteristics and Cash Holdings of Quoted Conglomerates in Nigeria

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Firm Characteristics and Cash Holdings of Quoted Conglomerates in Nigeria


Nestor Ndubuisi Amahalu1; Chibuike Charles Okudo2

1 Department of Accountancy, Nnamdi Azikiwe University Awka, Anambra State, Nigeria (

2 Department of Economics, Nnamdi Azikiwe University Awka, Anambra State, Nigeria (


This study examined the nexus between firm characteristics and cash holdings of quoted conglomerates in Nigeria. Six (6) conglomerates constituted the sample size of this study between 2002 and 2021. Ex-Post facto research design was adopted while secondary data were collected from the annual reports and accounts of the sampled conglomerates and analysed using E-Views 9.0 statistical software. The study employed descriptive statistics and inferential statistics using Pearson correlation and Ordinary Least Square (OLS) regression analysis. Cash holding was measured with cash ratio while firm characteristic was measured using firm size, research and development and leverage. Three hypotheses were formulated and statistically tested at 5 per cent level of significance using Panel Least Square Regression (PLS) analysis, granger causality test and hausman test. Findings from the empirical analysis showed that there is a significant negative relationship between firm size cash ratio and; a significant negative relationship between research and development and cash ratio; a significant negative relationship between leverage and cash ratio of conglomerates listed on Nigeria Stock Exchange at 5% level of significance respectively. It was recommended amongst others that conglomerates should prefer to fund themselves with resources generated internally before resorting to the market in order to safeguard the firms against potential concerns of having to suffer potential losses from forced sale of assets to obtain cash.

Keywords: Firm Characteristics, Leverage, Research and Development, Cash holdings

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