Abstract:

Cash holding is the most common form to reflect firm’s liquidity. Most Indonesian firms’ manager agreed that corporate hold an optimal amount of cash which maximizes shareholders’ wealth and operational performance. According to the Powell (2018), most Indonesian’s managers believe that there is relationship between growth opportunity, leverage, cash flow volatility, capital expenditure, and cash holding. Hence, we recognize to implement cash holding, required variables which has been examined by Powell (2018). Then this study is aimed to examine corporate cash holding determinants of manufacturing firms in IDX for period 2015-2017. The samples used are 81 manufacturing companies (243 firm-year observations) was selected using the purposive sampling technique. Our study find that leverage and capital expenditure have negative and significant impact toward corporate cash holding. While growth opportunity, cash flow volatility, and corporate governance with board independence as its proxy is found to have positive and significant impact to the corporate cash holding.