DETERMINANTS OF CASH HOLDING IN PAKISTAN: A CASE OF OIL AND GAS SECTOR OF PAKISTAN STOCK EXCHANGE

Abstract

This study investigates the identification of the determinants of Cash holding in
Pakistan of the Oil and Gas sector of Karachi Stock Exchange. Initially Multi
Regression Model is used to calculate determinants of Cash Holding. Afterwards
Hausman test and Breusch-Pagan test were carried out for Regression analysis and
pool effect model was selected for regression analysis. Regression analysis results were
that variables like Cash flow, Net Working Capital were insignificant in relation to cash
holding decision by firms, and other variables like Market to Book value; Leverage
shows a positive result which is significant in relationship to cash holding.