Article: World uncertainty and the marginal value of cash: suggestive nonlinear evidence from six ASEAN technology markets Journal: International Journal of Economics and Business Research (IJEBR) 2026 Vol.30 No.7 pp.1 - 24 Abstract: This paper examines how broad-based uncertainty shapes the value that equity investors assign to corporate cash holdings. Using the World Uncertainty Index (WUI) and a panel of listed technology firms across six ASEAN economies over 2000-2024, we embed a quadratic WUI interaction into the Faulkender-Wang excess-return framework. The estimates are consistent with an inverted-U pattern in direction: the marginal value of cash rises with uncertainty at moderate levels and then falls at high uncertainty, with an implied interior turning point within the observed WUI range. The interaction coefficients are imprecisely estimated and a joint test of both interaction terms fails to reject the null of no nonlinearity, so the pattern is better understood as directional in character, without claiming definitive support; its sign and implied turning point are, however, stable across alternative standard-error structures, cluster-bootstrap inference, and leave-one-out country samples. Heterogeneity tests suggest the curvature differs across R&D-reporting firms and the post-COVID period, though those differences are also imprecise. The paper contributes early evidence that the relationship between broad-based uncertainty and corporate liquidity valuation may be non-monotone in the ASEAN technology sector, a setting where financing frictions and irreversible investment combine to make the precautionary and paralysis channels especially consequential. Inderscience Publishers - linking academia, business and industry through research

Title: World uncertainty and the marginal value of cash: suggestive nonlinear evidence from six ASEAN technology markets

Authors: Nguyen Luong Gia Bao; Ngo Phu Thanh

Addresses: University of Economics and Law, Vietnam National University, 669 Do Muoi Street, Quarter 13, Linh Xuan Ward, Ho Chi Minh City, 700000, Vietnam ' University of Economics and Law, Vietnam National University, 669 Do Muoi Street, Quarter 13, Linh Xuan Ward, Ho Chi Minh City, 700000, Vietnam

Abstract: This paper examines how broad-based uncertainty shapes the value that equity investors assign to corporate cash holdings. Using the World Uncertainty Index (WUI) and a panel of listed technology firms across six ASEAN economies over 2000-2024, we embed a quadratic WUI interaction into the Faulkender-Wang excess-return framework. The estimates are consistent with an inverted-U pattern in direction: the marginal value of cash rises with uncertainty at moderate levels and then falls at high uncertainty, with an implied interior turning point within the observed WUI range. The interaction coefficients are imprecisely estimated and a joint test of both interaction terms fails to reject the null of no nonlinearity, so the pattern is better understood as directional in character, without claiming definitive support; its sign and implied turning point are, however, stable across alternative standard-error structures, cluster-bootstrap inference, and leave-one-out country samples. Heterogeneity tests suggest the curvature differs across R&D-reporting firms and the post-COVID period, though those differences are also imprecise. The paper contributes early evidence that the relationship between broad-based uncertainty and corporate liquidity valuation may be non-monotone in the ASEAN technology sector, a setting where financing frictions and irreversible investment combine to make the precautionary and paralysis channels especially consequential.

Keywords: world uncertainty; marginal value of cash; ASEAN; technology firms; nonlinear effects; precautionary motive.

DOI: 10.1504/IJEBR.2026.156338

International Journal of Economics and Business Research, 2026 Vol.30 No.7, pp.1 - 24

Received: 27 Apr 2026
Accepted: 03 Jul 2026
Published online: 13 Sep 2026 *

Title: World uncertainty and the marginal value of cash: suggestive nonlinear evidence from six ASEAN technology markets

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