Impacts of global economic policy uncertainty index on cash holding level of Vietnamese listed companies: A study of corporate governance

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Abstract

This paper aims to investigate the impact of the Global Economic Policy Uncertainty (GGEPU) index on the cash holding level of Vietnamese listed companies. The research adopts the model built by Demir and Ersan (2017) and conducts detailed analyses on different dimensional effects of GGEPU on corporate cash holding level in selected firms using the panel-data regression technique. The results show that the research firms display minor resistance toward changes in the GGEPU. Specifically, firm-specific financial characteristics have a significant impact on a firm’s cash holding decision. In addition, leverage is found to have a positive effect on the cash holding ratio. However, the study does not reflect the effects of tangible assets and capital expenditure on cash holdings of firms in the research sample. The major reason underlying these differences might rest on the financing options of the firms. This paper, therefore, highlighted the importance of companies’ policies to adjust cash levels to gain the highest performance regardless of changes in the GGEPU index. The research provides some implications and instructive recommendations for both firms and policymakers to better manage the cash holding level in firms in jurisdictions with an imperfect business environment, like Vietnam.

Keywords: Policy Uncertainty Index, Cash Holding Level, Vietnamese Listed Companies

Authors’ individual contribution: Conceptualization — T.T.H.N. and M.H.D.; Methodology — D.C.P.; Formal Analysis — P.L.N. and T.K.Y.P.; Writing— Original Draft — T.K.Y.P. and M.H.D.; Writing — Review & Editing — T.T.H.N. and D.C.P.; Funding Acquisition — T.T.H.N. and P.L.N.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G30, G32, M41

Received: 05.04.2025
Revised: 25.08.2025; 22.12.2025
Accepted: 08.01.2026
Published online: 12.01.2026

How to cite this paper: Nguyen, T. T. H., Pham, D. C., Nguyen, P. L., Pham, T. K. Y., & Do, M. H. (2026). Impacts of global economic policy uncertainty index on cash holding level of Vietnamese listed companies: A study of corporate governance. Journal of Governance and Regulation, 15(1), 84–93. https://doi.org/10.22495/jgrv15i1art8