Working Capital Management and Corporate Cash Holding: A Comparative Analysis of Conventional and Islamic Banks in Pakistan

Izhar Ullah , Dr. Alam Rehman , Muhammad Zeeshan , Fakhr E Alam Afridi
  • Izhar Ullah MS Scholar National University of Modern Languages Islamabad,
  • Dr. Alam Rehman Faculty of Management Sciences, National University of Modern Languages; Pakistan
  • Muhammad Zeeshan College of Business Administration, Liaoning Technical University, China
  • Fakhr E Alam Afridi Islamia College Peshawar Pakistan,

Abstract

This study was conducted to understand the impact of Working Capital Management on Corporate Cash Holding in the context of conventional and Islamic banks in Pakistan. In this study, we used the panel data of 31 banks in which 24 are conventional banks while 7 are Islamic banks. In this study, the data was collected from the annual reports of both conventional and Islamic banks from 2011 to 2017. The data was analyzed through various statistical techniques i.e. Descriptive Statistic and Correlation, Fixed effects, Random effects and Hausman test. The working capital management proxy such as cash flow ratio has positive and statistically insignificant effect on corporate cash holding of Conventional banks, while firm size and leverage show positive and statistically significant effects on corporate cash holding. Similarly, the cash flow ratio shows a positive and statistically insignificant effect on the corporate cash holding of Islamic banks in Pakistan and a positive and statistically significant effect of control variables. This contains certain managerial implications for both policymakers and investors

 

Key Words: Working Capital Management, Corporate Cash Holding, Conventional and Islamic Banks. Pakistan

Published
2020-09-26
How to Cite
[1]
I. Ullah, D. A. Rehman, M. Zeeshan, and F. E. A. Afridi, “Working Capital Management and Corporate Cash Holding: A Comparative Analysis of Conventional and Islamic Banks in Pakistan”, jmr, vol. 5, no. 2, pp. 50-63, Sep. 2020.