Research note: Cash holding and firm value: the case of Taiwan's tourism industry

This paper examines whether the percentage of cash holdings affects firm value in the tourism industry in Taiwan. Before the percentage of cash holdings reaches the threshold value, an increase in after-tax earnings boosts the firm's value. However, when the percentage of the cash holdings exceeds the threshold value, an increase in after-tax earnings decreases the firm's value. There is a non-linear relationship between after-tax earnings and firm value and between interest expenses and firm value. There are also smooth transition effects.