Description:
<jats:p>We join a recent surge of corporate cash literature by using a sample of hospitality firms to gain a new understanding of corporate cash holdings. Existing literature predominantly refers to US-listed firms and focus on either hotels or restaurants and not the hospitality industry as a whole. Therefore, we provide a comparative study of cash holdings behaviour between hospitality and non-hospitality firms in an emerging market context. Using a sample of public listed hospitality firms in Malaysia firms from 2002 to 2013, dynamic panel regression techniques are used to study the relationships between firm characteristics and cash levels. Also, the non-parametric Wilcoxon-Mann-Whitney test was carried out to examine the time and sectoral differences in cash holdings. The results reveal that firm characteristics do matter in hospitality firms. We also show that industry representation drives the difference in cash holdings between hospitality and non-hospitality firms. We find that firm size, capital expenditures, and liquid assets substitutes are negatively related to cash level. The results support trade-off theory and the pecking order theory. This study incrementally explains the cash holdings behaviour of hospitality firms in emerging market, such as Malaysia. This paper points to an avenue of investigation for future cash holdings research to include firm characteristics and industry as part of the cash holdings determinants.</jats:p>