Corporate cash holding and monetary policy

Corporate cash holding behavior is important to understand firms in terms of management and decision-making, and the finance literature provides diverse views on the determinants of corporate cash holdings. This study examines the cash holding decision from a macroeconomic perspective and investigates whether monetary policy affects firms’ cash holding decisions. The analysis based on Turkish listed non-financial firms suggests that monetary policy has no effect on corporate cash holdings, contrary to recent empirical evidence. In this regard, the results infer that the relationship between monetary policy and cash holding decisions established before in the literature could not be generalizable.