Investigating the Cash Holding Factors of Mining Industries in Indonesia Stock Exchange

다국어 초록 (Multilingual Abstract)

The purpose of this study is to explore determinant factors that enable mining companies for cash holding in Indonesia. The panel data gathered from 40 financial statements of mining companies in Indonesia for the period 2013-2017 with a total of 200 observations. The panel data regression analysis used to examine and select the best model by utilizing the common effect model, fixed effect model and random effect model. The results of the study found that a cash holding company was determined by the return on assets, return on equity, net capital working, firm size, leverage and cash conversion cycle. All research variables mentioned above support trade-off theory except return on assets. The limitation of this study emerged since it made no separate discussion between the largest and the smallest cash holding companies. The results of this study have implications for management and companies to investigate other indicators enabling companies to conduct cash holding. Some suggested variables are macroeconomic factors, payment of dividends and investment opportunities and separation of large and small companies. The management of mining companies in managing cash holding was required to observe closely to the independent variables that match the trade-off or pecking order theory even the free cash flow theory.

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