CORPORATE CASH HOLDING AND FIRM CHARACTERISTICS: EVIDENCE FROM NIGERIA'S IN AGRICULTURAL AND CONSUMER GOODS SECTORS

This work examined corporate cash holding and firm characteristics: evidence from Nigeria’s in agricultural and consumer goods sectors. The study was necessitated by the inability of some agricultural and consumer goods firms to take up expansionary opportunities without debt. Profit for the year (PFTY), and capital expenditure (CEXP), were used as proxies for firm’s characteristics being the independent variable, while cash holding was used as the dependent variable and was proxies by cash and cash equivalents (CCE). All the five agricultural companies and fourteen consumer goods companies listed on the Nigerian Exchange Group (NGX) as at the last working day of December, 2021 were selected using stratified sampling technique. Ex-Post facto research design was adopted. The study covered the period 2011-2021. Five hypotheses were formulated and tested using random panel regression output aided by E-views 9.0. Finding reveal that PFTY has positive and significant effect on CCE(r= 0.61346; P = 0.0052 < 0.05; t = 3.407741 > 2.0). This implies that as firms make more profits, the likelihood of having more cash holdings increases. CEXP has positive and significant effect on CCE (r = 0.115649; P = 0.0453 < 0.05; t = 2.719229 > 2.0). The implication is that an increase in CEXP will lead to increase in cash holding. The study concludes that PFTY, and CEXP, have positive and significant effect on CCE. Recommendations include taking up aggressive marketing and promotion as well as increased sales; thorough evaluation of capital expenditure, while strategic mergers and acquisition, and strategic investment in new and improved technology should be considered. Management should seek cheaper sources of funding to reduce the burden of servicing debt.