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This paper investigates the value of corporate cash holdings during the recent COVID-19 pandemic. Based on a sample of 147,512 firm-quarter observations of 51 countries, I find that the value of cash holdings strongly increased at the start of the pandemic in 2021, but diminished again in the later part of the pandemic. Using country-level measures of the impact of the pandemic, I further document that the value of cash is higher for firms that are located in countries with higher infection rates of COVID-19. Finally, I find that the positive effect of COVID-19 on the value of cash holdings is stronger in weak corporate governance countries with high infection rates in the first year of the pandemic, which is consistent with the argument that the likelihood of cash abuse is reduced in countries with weak corporate governance where COVID-19 hits hard. [ABSTRACT FROM AUTHOR]

We examine the influence of climate policy uncertainty (CPU) on corporate cash holding decisions of U.S. tourism and hospitality firms. We find that CPU is negatively associated with corporate cash holdings for tourism and hospitality firms in the United States. A further analysis indicates that the impact of CPU on cash holdings lasts 2 years and disappears afterward. We also show that CPU is negatively associated with corporate cash holdings for hotel firms, but its impacts on airline, restaurant, and casino firms are insignificant. Results from cross-sectional analyses show that financial constraints and climate risk exposure moderate the relationship between CPU and corporate cash holdings. Our main findings are insensitive to additional robustness tests, including an instrumental variable test and subsample analyses. Our results have timely implications for academics, investors, and regulators. [ABSTRACT FROM AUTHOR]

Copyright of Die Unternehmensbesteuerung (Ubg) is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose: Prior literature on the cultural determinants of cash holdings focuses on time-invariant cultural variables measured at the geographical level. These measures of culture do not capture the firm-level variation in corporate culture. Using a validated time-variant measure of firm-level corporate culture, specifically teamwork, we examine the effect of teamwork on a firm's cash holdings. Design/methodology/approach: In this paper, we explore the effect of corporate teamwork culture on firms' cash holdings. Using sudden CEO turnover as an exogenous shock to a firm's teamwork culture, we find teamwork increases cash holdings. Also, we test and find two channels—financial constraint and agency—and two new labour-related channels—human capital quality and labour inefficiency—through which teamwork culture affects cash holdings. Our results are robust to endogeneity tests. Findings: We find that teamwork increases the cash holdings of firms. We find that a firm with a high teamwork culture has higher cash holdings: an increase of one standard deviation in teamwork leads to a 14.6% rise in the mean cash holdings. Originality/value: To our knowledge, our study is the first to introduce the firm-level teamwork cultural construct as a determinant of cash holdings. [ABSTRACT FROM AUTHOR]

Strengthened tax enforcement increases firms' expected tax liabilities and uncertainty; thus, firms have incentives to hold more cash. Considering the staggered implementation of a new tax system that increases tax enforcement across provinces in China as a quasi‐natural experiment, we employ the difference‐in‐differences method to test the above prediction. The results indicate that stricter tax enforcement is associated with greater corporate cash holdings. This effect is stronger for financially constrained firms and those located in areas with high tax noncompliance penalties. Additionally, tax enforcement increases firms' propensity to accumulate cash from cash flows and decreases capital expenditures and dividend payouts. The main findings are robust to the stacked difference‐in‐differences method, alternative cash holding measures and different sample selections. [ABSTRACT FROM AUTHOR]

This study examines the impact of market volatility and cryptocurrency holdings on corporate liquidity, with a particular focus on the differences between cryptocurrency exchanges and other businesses. The analysis is based on 181 firm-year observations from 2017 to 2022, using Bitcoin volatility, VIX, and VKOSPI as indicators of market volatility. Ordinary Least Squares (OLS) and robust regression analyses are employed to assess the relationships between these variables. It is first noted that, albeit insignificant, market volatility has a detrimental influence on company liquidity. The positive correlation for cryptocurrency exchanges, however, suggests that cryptocurrency exchanges could potentially leverage market volatility as a strategic advantage. Additionally, the study shows that cryptocurrency holdings enhance corporate liquidity, with a stronger association observed in cryptocurrency exchanges. The analysis also incorporates lagged variables to capture delayed effects, confirming that cryptocurrency holdings exert both immediate and delayed positive impacts on liquidity, likely due to effective strategic management practices within exchanges. [ABSTRACT FROM AUTHOR]

Cash holding decision‐making is one of the main corporate challenges for family firms (FFs), with significant consequences for their growth and survival. It is closely connected to key financial decisions such as financing, investments, and dividends. The motivations behind adjusting cash holdings vary, encompassing precautionary, risk avoidance, opportunity cost considerations, and the spending hypothesis. In our study, we aim to integrate specific motivations for cash holding decisions that stem from the influence of family dynamics within these businesses since FFs have unique characteristics, which affect their financial choices. Therefore, we analyze the impact of family involvement in management and the generational stage of FFs on their level of cash holdings. The results of the partial least squares–structural equation modeling, which was estimated on a sample of 7269 unlisted Spanish FFs, show that the higher the level of family involvement in management, as well as the higher the generational stage, the higher the level of cash holdings, with this having a positive effect on the firm's performance. In addition, we find that the positive relationship between family involvement in management and the level of cash holdings is strengthened by family ownership and weakened by family governance. These findings are relevant for a better understanding of the complexity of cash holding decision‐making in FFs and have practical implications not only for the FFs themselves but also for the entities related to them due to the important links between a firm's liquidity and its risk of default and performance. [ABSTRACT FROM AUTHOR]

We find that customer firms with more concentrated supplier bases tend to hold higher levels of cash reserves. The positive relation between supplier‐base concentration and cash holdings is more pronounced for firms with nonstate ownership, higher market competition, worse inventory efficiency, more relationship‐specific investment, central positions in the production networks, and headquarters located in regions with lower levels of financial development. Furthermore, we show that debt issuance enhances firms' cash holdings when they have concentrated suppliers, and supplier‐base concentration increases firms' cash spending on R&D investment. Our study highlights the importance of supplier structure in shaping corporate cash policy. [ABSTRACT FROM AUTHOR]

This document provides summaries of research papers published in the Journal of the American Taxation Association. The first paper examines the relationship between stock price incentives and earnings management using tax expense. It finds that while stock price incentives are not significantly associated with earnings management on average, firms are more likely to manage earnings using tax expense as opportunities increase. The second paper discusses the impact of corporate tax disclosure regulation and highlights the limited effectiveness of disclosure regimes. The third paper presents a field experiment conducted by the California Franchise Tax Board, showing that improving Interactive Voice Response systems can enhance tax collection efficiency. The fourth paper investigates the effect of the Tax Cuts and Jobs Act on employees' pay satisfaction, finding a greater decline in satisfaction at firms announcing bonuses compared to those that do not. These papers offer valuable insights into various aspects of taxation and have implications for policymakers and firms. [Extracted from the article]

We examine the effect of state corporate income tax rate changes on firms' liquidity management. Using a difference-in-differences design, we find that firms hold more cash when they are experiencing an increase in state corporate income tax rate. More specifically, on average, a 1 percent increase in state corporate income tax rate leads to a 2.51 percent increase in firms' average cash holdings. We also find that the effect is stronger in firms with low and risky cash flows, more growth opportunities, and more financial constraints. We find no evidence of this relationship when the state corporate income tax rate decreases. Overall, these findings suggest that firms conserve more cash to mitigate tax-induced frictions, which is consistent with the precautionary motive of cash holdings. Our paper speaks to policymakers that the increase of state income tax rate has real effects on firms' cash holdings. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to investigate the relationship between uncertainty and corporate cash holdings with the moderating role of political connections. Design/methodology/approach: We employ fixed effects estimation on a panel dataset of 669 Vietnamese listed firms over the 2010–2020 period, with one- and two-way standard error clustering. We conduct various robustness tests, including two-stage least squares/instrumental variable and generalized method of moments regressions, alternative cash holding measure, and additional controls for macroeconomic conditions and ownership types. Findings: The effect of uncertainty on cash holdings is weakened for firms with political connections relative to those without the connections. Although general firms depend on cash flows to adjust their cash holding behavior when uncertainty increases, our findings suggest that politically connected firms do not rely on internal cash flows to accumulate cash when confronted high uncertainty. Practical implications: Our findings on the role of political connections in moderating the relationship between cash holding and economic policy uncertainty have practical implications for policymaking. Since political connections serve as a buffer for a firm's liquidity, firms may want to seek those connections, which can, in turn, lead to increasing informal costs and unfair business environment. Originality/value: This is the first study investigating the role of political connections to the nexus of cash, cash flow and uncertainty, providing novel evidence regarding the less dependence on internal cash flows to save cash by politically connected firms. Second, the paper enriches the literature on the motives of cash holdings by proposing a modified agency view in the context of weak investor protection. Therefore, our findings strengthen the explanation for the positive effect of uncertainty on firms' cash holdings in emerging markets. [ABSTRACT FROM AUTHOR]

We provide new insights into companies' decisions to cut CEO pay during the COVID-19 pandemic by comparing 482 firms announcing CEO salary cuts with those that do not. We find that salary cuts are more prevalent in firms with poor pre-pandemic performance, lower cash holdings, employee layoffs, and better governance. Shareholders appear to view these cuts favorably in firms with higher CEO pay ratios and those that are the first among their peer firms to make such an announcement. These findings suggest that pay cuts reflect efforts to adjust pay efficiently in response to changes in contracting environments and to lend legitimacy to other difficult decisions that firms face, alongside governance characteristics. We also find that CEO salary cuts coincide with well-timed equity grants that appreciate in value more than those in noncutting firms and with a shift away from earnings-based metrics in performance-based incentive plans. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: G34; M12; M21; M52. [ABSTRACT FROM AUTHOR]

Corporations have accumulated record amounts of cash. We study whether firms' cash retention has been excessive by examining a Korean reform that introduced a new tax on earnings retained as cash. Difference-in-differences tests show that treated firms reduce cash retention and instead increase payouts and investments. Market participants react favorably to the reform, consistent with excessive cash retention. The valuation effects and the alternative uses of the cash are associated with behavioral and agency frictions. Firms that are more subject to behavioral biases increase payouts and experience higher valuations, while poorly governed firms allocate more to investment and experience relatively lower valuations. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

This study investigates the impact of board characteristics on the relationship between political connections and cash holdings in Asian countries. The findings suggest that Asian firms with political connections, large boards, and gender diversity have lower cash holdings, while firms with CEO duality have higher cash holdings. Further, the study provides unique evidence that Asian firms with large boards and gender diversity have a moderating effect and strengthen the negative influence of political connections on cash holdings. We also find that CEO duality moderates the influence of political connections on cash holdings in Asian countries. The authors conclude that strong board monitoring and governance mechanisms are crucial for the effective use of cash, particularly in firms with political connections. This research contributes to the literature by presenting novel evidence that board characteristics critically influence the relationship between political connections and cash holdings in the Asian context. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between economic policy uncertainty and corporate cash holdings using data from seven emerging countries for the 2010–2018 period. Empirical results show that firms tend to hold more cash when EPU is high. Moreover, this positive relationship is stronger in countries with better control of corruption and in high uncertainty avoidance cultures. Results are robust to different measures of cash holdings and EPU. [ABSTRACT FROM AUTHOR]

This article studies the effect of bank liquidity supply on the corporate liquidity management choice between cash and lines of credit and the real effects of liquidity. By exploiting an exogenous shock to U.S. banks induced by the 1998 Russian crisis, I find that the liquidity shock has a significantly negative impact on U.S. firms' reliance on credit lines relative to cash. Firms who initiate their last precrisis credit lines from banks exposed to the crisis (treated firms) have a lower likelihood of obtaining new credit lines during the crisis relative to the precrisis clients of nonexposed banks (control firms). Moreover, firms hoard cash and cut investment after the shock, but the effects are concentrated among firms whose precrisis credit lines are maturing in the crisis. These results suggest that a shortage of credit lines forces firms to substitute cash savings for investment, indicating an important role of precautionary savings motives in transmitting liquidity shocks. [ABSTRACT FROM AUTHOR]

Purpose: In today's interconnected world, social capital has emerged as a crucial business competence, drawing significant attention in recent literature. Using social network analysis, this study aims to investigate the impact of network centrality, established by a firm through its board members (i.e. boardroom networks), on corporate cash holdings. Design/methodology/approach: This study uses extensive panel data comprising 36,963 firm-year observations of firms listed on the Australian Securities Exchange, spanning a 22-year period (2001–2022). The study uses firm fixed-effect regression along with several alternative specifications and an instrumental variable approach to ensure the robustness of the results. Boardroom network centrality is quantified by five measures that capture different perspectives on networks as viable conduits for resource exchange and information flow: degree, two-step reach, closeness, eigenvector and betweenness. Findings: The authors find evidence for the benefits of board networks. Firms with well-connected boards (central firms) are more likely to have smaller cash holdings. The findings also reveal distinct effects stemming from local and global properties of centrality, with local network measures playing a more pronounced role in shaping cash-holding decisions. Overall, the evidence reflects the ability of connected directors to enhance governance by limiting managerial discretion over cash reserves, thus reducing agency conflicts associated with cash holdings. Research limitations/implications: This study offers important insights for regulators, investors and practitioners, highlighting the potential for connected directors to effectively curtail managerial autonomy in deploying corporate cash holdings. Originality/value: This study contributes to the ongoing discussion about the advantages and drawbacks of board networks, which constitute a vibrant and burgeoning area of research in the finance literature. It also complements scanty network-based studies on firm cash holdings. Importantly, this study extends prior work by providing robust evidence and a comprehensive analysis of the nuanced roles that board networks play in affecting the level of cash reserves. [ABSTRACT FROM AUTHOR]

Institutional investors are considered experienced, professional investors who also have the know-how to monitor and guide the companies in which they invest with regard to financial decisions that impact the firms' solvency and corporate governance. We investigate whether there is an empirical relationship between the level of institutional investors' holdings in publicly traded firms and the firms' solvency. Using 9-years worth of data about 207 healthy and distressed American and Canadian public companies, we demonstrate a significant positive relationship between the firms' solvency and the level of institutional investors' holdings in the firms. This relationship is bidirectional. If the firm's solvency level decreases, the institutional shareholders "vote with their feet" and reduce their ownership in the firm. Thus, changes in the level of institutional investors' holdings in publicly traded firms provide other stakeholders with a signal about the potential solvency risks of these firms. Our study is the first to our knowledge that investigates empirically the direct relationship between the level of institutional investors' holdings in a publicly traded firm and its odds of encountering financial distress. [ABSTRACT FROM AUTHOR]

The average maturity of newly issued corporate bonds has declined substantially over the past 40 years, and the traditional determinants of debt maturity fail to explain this decline fully. We show that the changing composition of investors in the corporate bond market influences bond maturities. The results of a Granger causality test, an instrumental variable approach, and a natural experiment suggest that a decline in the insurance companies' – which prefer long-term bonds – ownership share in the corporate bond market explains a significant part of the unexplained maturity decline. These findings illustrate how investor preferences can have real effects on corporations. [ABSTRACT FROM AUTHOR]

This study investigates the effect of geopolitical risk (GPR) on cash holdings of Korean firms. Korea's export orientation, relationship with North Korea, and weak corporate governance together form the basis for studying the relationship between GPR and Korean firms' cash holdings. Using samples of non-financial firms from 2001 to 2021, I find the GPR positively affects corporate cash holdings. This effect is more pronounced in firms with financial constraints, listed in the KOSDAQ (smaller and less regulated) market, and during cold market periods. My finding withstands various robustness tests including fixed effects, an instrument-variable analysis, and alternative measures of GPR. Overall, this study adds to the existing literature on corporate cash holdings by confirming that firms increase cash holdings with a precautionary motive to create a buffer against GPR-generated uncertainty. [ABSTRACT FROM AUTHOR]

Using a unique database that includes publicly disclosed fund holdings at the end of the quarter as well as the holdings in all non-publicly disclosed months, we found that some funds could alter their portfolios in publicly disclosed months to artificially increase their Active Share scores and consequently appear more active and take advantage of the positive relationship between Active Share and money flows. We show how, consistent with non-informed trades, these funds erode their future performance. However, these funds reach their objective of increasing future money flows. Moreover, we find that window-dresser funds can be identified by controlling the level of tracking error. The funds with high Active Share scores and low tracking errors have the highest levels of Active Share window dressing and the worst future returns. However, compared with less active funds, they are able to capture higher money flows. [ABSTRACT FROM AUTHOR]

This study investigates the relationship between corporate cash holdings and investment efficiency, with a focus on how COVID-19 and the presence of women directors may influence this relationship. Using data from Indonesian public companies during the COVID-19 period, comprising 2350 firm-year observations, we employ fixed-effect regression models with industry and year controls to test our hypotheses. Robustness and endogeneity tests are conducted to ensure the reliability of our findings. Our research reveals that companies with larger cash reserves tend to experience decreased investment efficiency during the COVID-19 crisis. Moreover, the negative impact of substantial cash reserves on investment efficiency is exacerbated by the presence of female directors on the board. However, our findings also suggest that female directors can mitigate the adverse effects of excessive cash reserves on a company's investment efficiency, particularly during unforeseen economic challenges such as the pandemic. [ABSTRACT FROM AUTHOR]

Purpose: The current analysis aims to explore the role of cash holdings in the nexus of national governance and capital investment (CIN). Design/methodology/approach: To achieve this aim, the authors sample the nonfinancial enterprises from 5 Brazil, Russia, India, China, South Africa (BRICS) economies and employ system generalized method of moments(GMM) models as an estimation technique. Findings: The empirical analysis infers that national governance has a positive relationship with CIN and a negative relationship with cash holdings. The cash holdings negatively determine CIN. However, the cash holdings show a positive relationship with CIN in the presence of the national governance index (NGI). Research limitations/implications: The important policy layout of the current analysis is that corporate managers should reduce cash holdings during better governance situations. Alternatively, corporate managers can disentangle the negative impact of bad country governance conditions on CIN by holding more cash. Originality/value: The study is innovative as it explores mediating impact of cash holdings in the NGI-CIN nexus. [ABSTRACT FROM AUTHOR]

We study the impact of a unique financial anomaly—the simultaneous persistence of greater cash holdings and interest‐bearing debts (SP‐GCHID) on stock price. Due to institutional diversity and the nature of transition economies, high cash holdings do not always stem from precautionary motive as usually claimed but can be the result of cash misappropriation and debt manipulation by major shareholders. Analysing data from Chinese listed firms from 2010 to 2018, we find that SP‐GCHID is associated with a higher stock price crash risk (SPCR). It is more evident among firms with major shareholders pledging their shares and firms exposed to more external information monitoring. SP‐GCHID also affects SPCR through increasing real earnings management, further suggesting that major shareholders' misappropriation is the main reason for SP‐GCHID's adverse effect. These findings are also robust in a range of endogenous tests. To our knowledge, this study is the first to explore the economic consequences of SP‐GCHID. [ABSTRACT FROM AUTHOR]

This study advances the literature in cash holdings in that it empirically examines the impact of corruption prevention commitment (CPC) on the cash holding strategic decisions and how such CPC might interact with cash holdings to affect firm value. We employ a sample of UK non‐financial publicly listed firms and our results are of twofold. First, we detect a significant negative relationship between CPC and cash holdings, which is consistent with the expected governance effect of CPC. Second, we find a negative interaction of CPC with cash holdings when investigating cash holdings effect on firm value, suggesting that shareholders consider CPC as an overinvestment in corporate social responsibility (CSR) activity within a strong customer protection framework, such as the UK. Our findings are robust to different econometric estimations and controlling for different explanatory variables. This study offers beneficial perceptions into the notion of sustainability and sustainability standards and their implications on firms financing decisions. Finally, we argue that while this paper investigates the UK context, our results might be applicable to other countries with similar anti‐corruption structure as in the UK. [ABSTRACT FROM AUTHOR]

Using textual analysis techniques, including seeded word embedding and bag-of-words-based content analysis, I develop a firm-level measure of supply chain risk exposure from a novel source of unstructured data—the discussion between managers and equity analysts on supply chain-related topics during firms' quarterly earnings conference calls. I validate the measure by showing that (1) the measure exhibits intuitive variations over time and across firms, successfully capturing both routine and systematic supply chain risk events; and (2) the measure is about risk exposure, as it significantly correlates with realized and options-implied stock return volatility, even after controlling for well-known aggregate risk measures. I then demonstrate that the measure is specifically indicative of the supply chain component of risk exposure. (3) Consistent with theoretical predictions, firms facing higher supply chain risks have higher inventory buffers, particularly in raw materials and intermediate inputs, increased cash holdings in lieu of investments, and significantly lower trade credit received from suppliers. Moreover, (4) during unexpected risk episodes, such as the Tohoku earthquake, firms with higher ex ante risk exposure have worse operating and financial performance. These results indicate that the text-based measure provides a credible quantification of firm-level exposure to supply chain risks and can thus be reliably utilized as outcome or explanatory variables in empirical supply chain research. This paper was accepted by Jeannette Song, operations management. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4927. [ABSTRACT FROM AUTHOR]

This study examined why consumers who typically pay electronically at points of sale still carry cash and explained the inertia of demand for cash by considering the additional (perceived by consumers) characteristics of cash. The research was motivated by the growing discussion on why cash, despite the increasing importance of e‐payments, remains a significant part of the demand for money. The study focused on psychological factors and consumers' perceptions of certain features of cash, which make it an attractive additional option for precautionary reasons, and therefore, explored beyond the typical discussion of money as a means of payment. The structural equation modeling based on data collected as part of a survey of Polish consumers was used to verify the hypotheses. It was revealed that cash becomes a reserve solution for consumers, which is kept "just in case" to expand the scope of personal freedom and flexibility in making payments and protect against various potential restrictions and threats related to e‐payments. Consumers' holding of cash as an additional option depends on three key factors: attitude toward cash, particularly the flexibility it offers, unusual purchasing situations, and perceived card or mobile payment risk, considered as a moderator. In the debate on the future of cash, the study supports the position that cash has a place in the modern payment system, although it plays a different role. Cash is a supportive backup solution. Eliminating cash significantly reduces consumer welfare. [ABSTRACT FROM AUTHOR]

Multifactor productivity (MFP) growth is an imperative economic engine. MFP dynamism across five advanced and seven developing countries from 1996 to 2015 is analyzed, elucidating its association with financing and intangible assets. Debt is manifested by its inverted U-shaped nonlinear relationship with MFP advancement, while corporate cash holdings are negatively (positively) associated with MFP development in five (three) countries. The heterogeneous relationships between intangible assets and MFP growth are identified across industries, countries, and time; intangible assets are requisite MFP growth enhancers for manufacturing in developing countries, for service businesses in advanced countries, and for the period after the global financial crisis. The greater the productivity effect of intangible assets is, the higher a country's per-capita income and/or governance quality becomes. Additionally, the results evince the catching-up of MFP to the technological frontier. Moreover, older firms exhibit slower MFP growth than their peers, whilst the positive effects of firm size on MFP growth are larger in high-tech and knowledge-intensive industries. [ABSTRACT FROM AUTHOR]

This paper examines whether state ownership and political connections affect the relationship between customer concentration and cash holdings for Chinese listed manufacturing firms. We show that non‐state‐owned firms, but not state‐owned firms, hold more cash as customer concentration increases. In addition, political connections weaken the positive effect of customer concentration on non‐state‐owned firms' cash holdings. Our supplemental analyses further show that for non‐state‐owned firms with limited access to finance—for instance, firms with low analyst following, low institutional ownership, or low government subsidies—the effects of political connections on weakening the positive association between customer concentration and cash holdings are more pronounced. Additional robustness tests support our arguments. [ABSTRACT FROM AUTHOR]

We examine the catering of managers to investors' preference for cash holdings. We find that cash is positively related to the cash‐holding premium as represented by the difference in the market‐to‐book ratios between cash‐rich and noncash‐rich firms. This positive effect can be attributed to different sources such as internal and external financing, and firms may switch their sources for holding cash when catering to investors' preference. Issuing firms benefit from catering to cash holdings by obtaining higher valuations from the stock market. The catering theory helps explain cash savings especially for firms without a good timing window or financing need. [ABSTRACT FROM AUTHOR]

We find a significant positive role of chief executive officer (CEO) social capital on the level of corporate risk‐taking for Chinese listed firms from 2008 to 2019. We reveal that a better business environment tends to reduce this positive relationship. In addition, we also find that corporate innovations provide moderation effects on the relationship. Further analysis of heterogeneity tests on firm characteristics suggests that CEO social capital's effect on corporate risk‐taking is significant and stronger for non‐state‐owned enterprises, firms with fewer female directors on their board, and firms with more cash holdings. [ABSTRACT FROM AUTHOR]

Chinese firms simultaneously have high levels of loans and cash holdings. Through listed firms on the Shanghai and Shenzhen Stock Exchanges, we establish a negative link between cash holdings and a firm's loan bargaining power, especially in regions with less bank competition, through a firm's passive response to bank requests rather than its voluntary excess cash reserves. Furthermore, state ownership, collateral, economic contribution, and reduced information asymmetry may effectively strengthen firm bargaining power and moderate the link. However, better marketisation strengthens the link. The banking sector may need to improve its efficiency through better credit rationing in future reforms. [ABSTRACT FROM AUTHOR]

I conjecture that a firm's sensitivity to industry shocks escalates its need to retain a cash buffer. Consistent with this conjecture, I find that a 1 SD increase in a firm's industry risk exposure increases cash holdings by 10%. In fact, industry risk has a greater effect on corporate cash holdings than does economywide and idiosyncratic risk in my sample. The effect of industry risk exposure on corporate cash holdings is greater for firms in highly competitive industries, as well as for firms with high leverage, a greater fraction of short‐term debt, and few tangible assets. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This research investigates how supply chain finance (SCF) affects the investment efficiency of new energy firms by adopting a sample of Chinese listed new energy enterprises from 2011 to 2019. With the help of data envelopment analysis (DEA) combined with the Banker-Charnes-Cooper (BCC) model, we calculate efficiency values and analyze the regression results of the Tobit model, and find that SCF significantly boosts the investment efficiency of new energy corporations by improving their cash-holding position. The results of mechanism analysis also suggest that both supply chain concentration and digital finance positively magnify the relation between SCF and corporate efficiency. After comparing the impact in the new energy firms with different characteristics, we conclude that the SCF effect in promoting corporate investment efficiency is more prominent for non-stateowned new energy enterprises located in the western region that have low equity concentration. The conclusions of this paper shed new light on the fusion of the SCF business into building a new energy industry cluster. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study is to examine the relationships between chief executive officers (CEOs) with military service and firm dividend and cash holding decisions. Design/methodology/approach: The authors use a sample of Standard and Poor's (S&P) 1500 firms in the USA over a sample period from 1999 to 2017 and a panel data approach, as well as instrumental variable (IV)analysis. The models control for firm characteristics as well as industry and year-fixed effects. Findings: The results show CEOs with military service are associated with higher total payout and less cash. Higher dividends appear to drive the total payout result. When cash holdings are split into pure cash and short-term investments, the reduction in cash holdings is driven by a reduction in pure cash. The findings are more pronounced for powerful CEOs and CEOs with low labor mobility. Military CEOs are also associated with less risk, measured by stock return volatility and return on assets (ROA) volatility. Originality/value: Overall, the results are consistent with military CEOs implementing conservative policies that reduce firm risk, curtailing the demand for precautionary cash and reducing the necessity to forego dividend payouts. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of the study is to investigate the impact of asset redeployability on the level of corporate cash holdings. Design/methodology/approach: The authors use regression analysis to examine the relation between asset redeployability and corporate cash holdings. Findings: Using a large panel sample of US public firms from 1990 to 2020, the authors find a significant positive relation between asset redeployability and cash, which suggests that firms with more redeployable assets hold more cash. Originality/value: The authors contribute to a growing literature in accounting and finance that investigates the impact of asset redeployability on firm characteristics and also contribute to the literature on the determinants of cash holdings. [ABSTRACT FROM AUTHOR]

Given that marriage transforms people, with wide‐ranging and long‐lasting impacts, we examine the role of CEOs' marital status on firms' cash holdings behaviour. Using a large sample of US‐listed firms, we find that single CEOs stockpile more cash than their married counterparts do. Our finding is robust to controlling for various CEO characteristics, CFO influence, tackling endogeneity concerns and using alternative measures of cash. Moreover, we show that exogenous CEO turnover resulting in appointments of single (married) CEOs increases (decreases) cash holdings. Additional results show that single‐CEO firms practise a more conservative payout policy and save more cash from operating and financing cash flows. Consistent with agency theory, single CEOs extract more compensation from the accumulated cash, leading to a lower value of cash holdings. External corporate governance mechanisms mitigate the relationship between single CEOs and cash holdings. Our results show that single‐CEO firms are more prone to agency problems. [ABSTRACT FROM AUTHOR]

The paper evaluates the impact of Covid-19 pandemic on firm performance along with other corporate finance variables. As expected, Covid-19 had a negative impact on firm’s performance, especially on small firms with pronounced leverage. The paper also highlights that firms with higher cash holdings were resilient in the face of the pandemic. Manufacturing firms were the worst hit as their tasks could not be executed remotely; supply chain of raw materials was severely disrupted. Another sector that bore the brunt was travelling and hospitality, where tasks cannot be digitized. [ABSTRACT FROM AUTHOR]

The development of financial institutions is in line with the massive development of the internet and technology, so the growth of fintech financial institutions is currently still an interesting topic to discuss. Most research on fintech uses a qualitative approach; this is because the topic of fintech is still in its early stages of development. By using a quantitative approach, this research makes a different contribution, namely by measuring the performance of fintech in Indonesia as a study of the context of developing countries. In addition, most research on fintech is still in the form of definitions and ecosystems of fintech financial institutions. Studies on fintech performance are still limited; this is explained by access to fintech financial report databases that have not been published standardly. This study examines the health of fintech financial institutions by looking at their influence on cash management and corporate riskiness. Studies included testing peer-to-peer lending fintech companies registered with the OJK and making observations during 2019-2022. The analysis method used was ordinary least squares regression from panel data. The results of the study show that there is no influence of cash holdings on company performance. A significant influence is shown by the negative influence of risk using the solvency ratio, although when measured using the liquidity ratio, the results are not significant. The test results prove the role of transactional motives in cash management for fintech companies in Indonesia. [ABSTRACT FROM AUTHOR]

The study examines the relationship between debt financing and firm performance through the lens of agency costs during the Covid-19 period for standalone firms and firms affiliated with business groups. It does the same for firms engaged in manufacturing and services. Using 4,422 firm-year observations from nonfinancial firms from 2014 to 2020, the study finds that business group firms raised more new debt vis-à-vis standalone firms. On the other hand, service sector firms raised more debt than manufacturing firms. The findings suggest that agency costs declined during the Covid-19 shock, enabling firms to raise debt primarily to increase their liquidity during an uncertain period. Companies had a substantial amount of cash meant for investments in the future. Under these circumstances, corporate governance mechanisms should be strong to prevent the misallocation/misappropriation of funds, thus reducing future agency costs. [ABSTRACT FROM AUTHOR]

The paper seeks to examine the role of Islamic finance as a mediating instrument in a case of an increasing population and housing deficit. The paper adopted a content review analysis and a modified revenue function approach in analyzing the potentials of the instruments of Islamic finance. The study focused on zakat, sadaqah and sukuk as tools of Islamic financing. E-Sadaqah was analyzed based on the number of active Telecoms line subscribers in Nigeria, and if N20 is paid weekly at a 5% level of cash collection error rate coupled with an admin expenses of 15%. The study revealed that zakat has the potentials of generating about USD8M-USD21M while sadaqah could generate N154 billion annually. If combined they can be used to improve the welfare or needs of the growing population. The study further revealed that sukuk if issued to the tune of N1,002 billion which can be utilized to build about 330,820 housing estate across the six (6) geopolitical zone of the country. The study concluded that Islamic finance can contribute significantly in addressing these economic ills of increasing population and housing deficit. The study recommends that efforts should be made on public awareness in order to enlightened the Nigerian populace about benefits of zakat, sadaqah, sukuk via local media like TV, radio in local dialects, magazines, articles, legal framework such as Zakat Act is required and deployment of IT infrastructure. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine the association between environmental, social and governance (ESG) performance and cash holdings, as well as whether this association is moderated by Shariah-compliant status. The aim was to test the joint effect of two ethical precepts, namely, the ESG and Shariah-compliant status, in explaining variations in cash holdings. Design/methodology/approach: A sample set that consisted of 9,244 firm-year observations from 25 countries from 2016 to 2020 was analysed using regression analysis. Firm-level data were sourced from Thomson Reuters and Refinitiv databases, while country-level data were derived from the World Bank and Hofstede Insights websites. Findings: Firms with greater ESG performances were found to have higher cash holdings. The positive association between ESG performance and cash holdings was greater for Shariah-compliant firms compared to non-Shariah-compliant firms. In support of the stakeholder theory, the evidence indicated that Shariah-compliant firms with higher ESG commitments also have higher cash holdings as part of their corporate strategy. Practical implications: These findings provided further comprehension to investors that ESG practices among Shariah-compliant firms are essential information during investment decision-making processes. Social implications: These findings highlighted ethical corporate practices through two frameworks, namely, ESG commitment and Shariah compliance; hence, contributing towards strategies to reach the Sustainable Development Goal 16 of promoting just, peaceful and inclusive societies. Originality/value: This study has focused on the motives for cash holdings by considering the ethical precepts embodying ESG and Shariah compliance to uphold the positive impact of high cash reserves. [ABSTRACT FROM AUTHOR]

We study the relationship between climate change social norms (CCSN) and corporate cash holdings for U.S. firms. We find that county-level CCSN is significantly positively associated with cash holdings. Our main finding is robust to a battery of robustness tests. In a subsample analysis, we find that firms have relatively low cash holdings in low CCSN counties even when faced with high climate risk. For such firms, the lack of cash buffer could be harmful to a broader set of stakeholders faced with heightened climate risk. We also show that cash holdings are a potential mechanism through which CCSN influences future environmental corporate social responsibility (CSR) performance. Overall, our study suggests that county-level CCSN has significant implications for corporate cash holdings. [ABSTRACT FROM AUTHOR]

Our study investigates how CEO-friendly boards influence the value and utilization of cash resources. In this paper, we analyze two conflicting views on CEO-friendly boards and their impact on corporate cash holdings: one view posits that such boards might be too lenient, fostering managerial moral hazard problem, while the other contends that they encourage CEOs to share information, despite CEOs knowing that better-informed boards could enforce stricter oversight. By measuring board friendliness through CEO-board social ties, we find that firms with a friendly board tend to maintain lower cash reserves but their excess cash is valued higher by the market compared to firms without such a board. Moreover, these boards deploy excess cash in ways that significantly enhance firm value. The results remain robust even after controlling for various governance variables and CEO characteristics. Our findings offer crucial insights for corporate practitioners and policymakers, highlighting the importance of appointing and retaining CEO-friendly directors to foster effective information exchange, especially in firms with substantial CEO-board information asymmetry in capital budgeting. [ABSTRACT FROM AUTHOR]

The researcher examines the effect of spending on corporate social activities on cash holdings. The financial dataset was collected using the Prowess database and corporate social responsibility expenditure from the Indian CSR portal. Using a panel dataset of 12 Central Public Sector Enterprises indexed in the National Stock Exchange was considered as a sample for the current research. A random effect model was applied to test the hypothesis. The study's findings provide a positive indication of the causal effect of spending in corporate social activities on cash holdings. The author has considered the expenditure amount of corporate social responsibility on the sample of public sectors undertaking of India. As in previous studies, authors had considered CSR ratings. This study provides proficient information to the top management level, shareholders, and stakeholders of the Central Public Sector Enterprises regarding the disbursement of corporate social activities in India. [ABSTRACT FROM AUTHOR]

The literature about the influence of country corruption on corporate cash holdings is not conclusive as there are studies supporting both a positive and negative relationship. To better explain this relationship, our study introduces a corporate-level mediating variable, i.e. the company's willingness to fight bribery as part of its CSR policy. Using a sample of 1,075 listed firms from 21 European Union countries for the period 2008–2019 (7,771 firm-year observations), we find a partial mediating effect of the corporate anti-bribery policy on the relationship between country corruption and corporate cash holdings. On the one hand, according to the shielding argument, country corruption negatively influences corporate cash holdings. And, on the other hand, there is a mediating effect such that firms in corrupt countries adopt less tough anti-bribery policies and, instead, they reduce their cash holdings both to protect themselves from expropriation and to signal their limit on bribe payments. [ABSTRACT FROM AUTHOR]

The prior literature links cash holdings and returns (Simutin (2010), Palazzo (2012)). Using two signals of aggregate-funding availability, I find that the positive association between cash and returns only exists during constrained funding environments. In unconstrained periods, there is no association between cash and returns. The relation in constrained environments does not appear to be related to capital expenditures, expected return, or distress risk but is more prevalent in firms undertaking research and development (R&D) expenditures. This suggests that the association between cash and returns is more consistent with expanding (or maintaining) future growth opportunities rather than being attributable to differences in capital expenditures or risk. [ABSTRACT FROM AUTHOR]

We show that high cash holdings can be used by executives in the ex post bargaining over their compensation. Cash holdings are positively associated with CEO compensation and is driven by non-salary components. In companies with weaker governance, this relation is more pronounced. Using exogenous shocks to the firm's cash, we show that CEO compensation readily responds to increases in cash holdings, confirming that managers are able to derive personal benefits from excess cash holdings. [ABSTRACT FROM AUTHOR]