IT 기업의 현금보유에 대한 연구

The Cash Holding of IT Firms: Evidence from Korean Listed Firms

It is widely known that firms in IT industries require much more capital expenditures and R&D investment than other industries, which has positive impact on intangible asset efficiency and firms value. However there exists information asymmetry on the firm’s investment payoff between corporate CEO and outside investors and therefore firms confront difficulties in external financing. In this paper, we investigate whether cash holding is different between firms in IT sector and firms in the non-IT sector. Finance literatures indicate that cash holdings is determined by trade-off theory or agency theory. In this paper, we examine corporate cash holdings, focusing on trade-off theory which means that firm tends to accumulate cash for transaction and precautionary motives. Empirical results show that IT firms are inclined to hold higher level of cash than others, which implies that IT firms have motives to maintain larger internal fund for future investment spendings. Additionally, we investigate factors that affect the cash holding of IT firms, using interaction terms. We find that the positive relation between IT firms and cash holdings is less pronounced in firms in manufacturing industries, firms with more analyst followings, firms with higher foreign ownerships, and/or firms of larger size. Our all findings support the hypothesis that IT firms is likely to hold more cash for future capital expenditures and R&D investments and corporate cash holdings are associated with the difficulties in external financing.