What Determines Corporate Cash Holdings in Kazakhstan? Evidence from publicly traded non-financial companies.

Abstract

This study investigates the determinants of corporate cash holdings in publicly listed non-financial firms in Kazakhstan over the period 2017-2024. Using hand-collected financial data from KASE and AIX, and following the empirical approach of Bates et al. (2009), I examine how investment intensity, growth opportunities, liquidity generation, ownership structure, and macroeconomic conditions shape firms’ cash-holding behavior. The results show that market-to-book ratios and operating cash flow are consistently associated with higher cash balances, reflecting precautionary motives and the financing of future investment. In contrast, firms with higher capital expenditures tend to hold less cash. Other variables including firm size, profitability, and leverage display weaker or mixed effects. State ownership, while generally linked to higher cash levels, does not have a statistically significant relationship. The findings remain robust when controlling for year effects, macroeconomic conditions, and when alternative measures of cash holdings are used. Overall, the cash-holding patterns of Kazakhstani listed firms largely mirror those observed in international markets, providing one of the first systematic views of liquidity management practices in a frontier Central Asian economy.