Resumen de The dynamic speed of cash-holding adjustment in a transition economy: : A new approach and evidenc

Liang Chang, Kebin Deng, Xuan Wang

• Using a new approach, we estimate the speed of cash-holding adjustment for a typical transitional economy by using Chinese listed firms’ samples over 1999–2011. First, we use model-averaging techniques to identify reliably important cash-holding determinants. Second, we conduct Monte Carlo simulation using the real finance data to evaluate appropriateness of the empirical estimator from a variety of dynamic estimation methods and suggest an optimized system of generalized method of moments (OPT-GMM) as an appropriate econometric approach for speed estimation. Finally, we get the speed of 46 percent, which is significantly lower than the contemporary speed in the United Kingdom and the United States