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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 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]

This paper estimates the degree of financial constraints faced by Russian publicly traded companies using the two most common approaches in the literature. We find that both Russian company investment and cash holdings are sensitive to cash flows, suggesting that the average sample firm is financially constrained. State-owned companies appear less financially constrained. After 2014, when economic sanctions restricted access to foreign capital, Russian companies became more financially constrained and more dependent on accumulated cash reserves. Overall, our findings highlight the importance of financial constraints in the context of developing countries. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to investigate the relationship between political connections, financing decisions and cash holding. Design/methodology/approach: Based on historical data from 181 active non-financial firms listed on Gulf Cooperation Council (GCC) Stock Exchange Markets during the period of 2009–2016, this study uses ordinary least squares and dynamic system-generalized method of moments to test the research hypotheses. The final data set comprises a total of 1,448 firm-year observations from ten major non-financial industry classifications. Findings: This study finds a positive relationship between political connections and each of internal financing proxied by retained earnings ratio and external financing proxied by short- and long-term debt to total asset. The findings also show a positive relationship between political connections and cash holding. Practical implications: The findings of the study provide a better understanding of the role of politically connected directors in financing decisions and cash holding in the GCC. Investors can consider the presence of royal family members in the board of directors when making investment decision. Policymakers are encouraged to develop more effective policies that encourage listed firms to provide information on the political positions of the board of directors, managers and major shareholders/owners of companies. Originality/value: This study contributes to the literature by providing empirical evidence on the relationship between political connections and financing decisions by focusing on the GCC region. This study also highlights that boards in connected firms in the GCC have lower monitoring role owing to political interventions, and that connected firms face higher agency problems as they have weak governance and boards compared with non-connected firms. [ABSTRACT FROM AUTHOR]

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]

Cash holdings are vital for a firm's resilience and ability to capitalize on investment opportunities amid economic fluctuations. In this study, the complex relationship between macroeconomic cycles, government policies, and the cash holdings of Chinese listed firms is investigated. By analyzing data from Shanghai and Shenzhen A-share listed firms from 2004 to 2019, this research uncovers the individual and combined effects of economic cycles and monetary policies on corporate cash management. Key findings include the following: (1) A significant negative correlation between cash holdings and economic cycle volatility indicates that firms tend to increase cash holdings during periods of instability and reduce them during economic stability. (2) There is a strong negative relationship between restrictive monetary policy and cash holdings, suggesting that firms accumulate more cash to safeguard against tighter financial conditions. (3) The interplay between economic policies and business cycles reveals that during recessions, restrictive monetary policy increases cash holdings, while economic policy uncertainty reduces them. In contrast, during economic prosperity, monetary policy has a minimal impact on cash holdings. These insights emphasize the need for firms to integrate both economic cycles and policy environments into their cash management strategies. The findings offer valuable guidance for policymakers and business leaders aiming to enhance financial stability and optimize cash holdings across different economic conditions. [ABSTRACT FROM AUTHOR]

We examine the causal impact of climate uncertainty on companies' cash holdings using local temperature trends. We find a notable increase in cash reserves among companies in response to rising climate‐related risks. We also identify two significant channels through which climate uncertainty influences firms' cash management: heightened environmental enforcement risk and increased physical risk. Furthermore, we observe that the positive effect of temperature trends on cash holdings is more pronounced for financially constrained firms and those with a lower level of environmental protection awareness. External financing through equity and debt issuance, as well as cost reduction strategies involving research and development and selling, general, and administrative activities, represent viable avenues for firms to bolster their cash reserves. However, financially constrained firms are less inclined to build up cash reserves through debt financing. Our findings underscore the precautionary nature of corporate cash policies and shed light on how temperature fluctuations can significantly shape corporate behavior. [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 study investigates the effect of the Brazilian Corporate Sustainability Index (ISE) on cash holdings and the moderating role of Covid‐19. Our sample comprises 213 non‐financial publicly listed firms from Brazil with 1072 firm‐year observations available on Refinitiv Eikon database from 2015 to 2022. Our overall findings show a positive association between ISE and cash holdings for the entire period analyzed. However, we find that ISE companies retained less cash in the pandemic period. Furthermore, external financial constraint is a channel through which ISE companies tend to lower their levels of cash holdings during the Covid‐19 outbreak. Our main results are robust to alternative measures of cash holdings. Therefore, we contribute to the corporate financial, sustainability, and Covid‐19 literature by providing the first empirical evidence of the dynamic nature of the relationship between ISE and cash holdings during external shocks and further comprehension to investors that sustainable practices reflected on the financial resource strategies are essential information during crises. [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 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]

The present research aims to investigate the relationship between financial variables of working capital, Cash holdings, and profitability. In this research, the average collection period, average inventory turnover duration, average debt payment period, and free cash flow of the firm are independent variables, and the return on assets and return on capital are dependent variables. Also, Firm size and financial leverage are control variables. Regarding the research topic, Tehran Stock Exchange-listed enterprises make up the statistical population of the current study. 77 businesses were chosen as selected samples for this study. Companies listed on the Tehran Stock Exchange from the beginning of 2014 to the end of 2019 were used to compile data for this study. In this research, to test the hypothesis was used multiple regression analysis with the method of mixed data with fixed effects. Research results indicated that there is a significant relationship between working capital and cash holdings and return on assets. Also, there is a significant relationship between working capital and return on capital. [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]

In this study, we explore the relationship among debt capacity, cash holdings and financial constraints by using the deviation in leverage as a proxy for debt capacity. Our findings show a positive relationship between cash holdings and debt capacity. Furthermore, financially constrained firms benefit more from holding cash that leads to larger increases in debt capacity and easier access to bank loans and credit lines by reducing the heterogeneous beliefs of creditors. Our results indicate that cash holdings complement debt capacity for financially constrained firms. [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]

Purpose: This study empirically examines the nonlinear effects of mimicking peer firms' cash holdings on shareholder value, with consideration of macroeconomic conditions. Design/methodology/approach: An instrumental variable approach for nonlinear models is estimated for a large sample of US firms over the period 1991–2019. This approach addresses the reflection problem in examining peer effects, whereby it is impossible to separate the individual's effects on the group, or vice versa, if both are simultaneously determined. Findings: The authors find an inverted U-shaped association between shareholder value and mimicking intensity of peer firms' cash holdings. This result suggests that mimicking peer firms' cash holdings is subject to diminishing returns. It is more beneficial at lower levels of mimicking intensity but less so or suboptimal at higher levels. Further evidence indicates that this inverted U-shaped shareholder value-mimicking intensity nexus is asymmetric. Specifically, it is salient for decreases relative to increases in cash holdings and, more importantly, in good relative to bad macroeconomic states. The findings are robust to several concerns and have important implications for liquidity management policies. Originality/value: The authors provide new empirical evidence of the nonlinear effects of mimicking peer firms' cash holdings on shareholder value, which varies with macroeconomic conditions. [ABSTRACT FROM AUTHOR]

This paper examines the link between a firm's characteristics and advertising budget allocation. It also shows the firm's behavior after the Asian financial crisis and the American subprime mortgage crisis. Results show that crises can significantly impact management decisions. They can influence how multinational companies plan for their future. The study also identifies the macroeconomic factors that can influence a firm's decision to allocate funds. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Technology Economics is the property of Chinese Society of Technology Economics 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 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]

This study analyzes the impact of knowledge capital (KC), a key element of firms' innovation and competitiveness, on stock returns during economic crises when sustainable competitiveness becomes particularly important. We analyze the impact of the Global Financial Crisis and COVID-19 as economic crises, focusing on manufacturing industries with a high proportion of investment shifts from physical capital to KC. Our findings indicate that KC is positively associated with stock returns during the Global Financial Crisis and COVID-19. This positive relationship is strengthened by the firm's ability to leverage KC, as measured by greater product market share, higher Tobin's Q, and larger cash holdings. This study emphasizes the protective role of KC during the economic crisis when the market pays more attention to corporate sustainability and provides implications to corporate managers and investors. [ABSTRACT FROM AUTHOR]

This study examines the relationship between market competition and cash holdings in the Chinese stock market from 2000 to 2019. By focusing on China as the research environment, we aim to shed light on how market competition influences a firm's cash holdings, considering the evolving nature of product market rivalry in China's changing economic landscape. Our empirical findings reveal that increased market competition stimulates higher levels of investment by enterprises, leading to a decrease in cash holdings as firms rely on internal funding for their investment activities. Consequently, the relationship between market competition and cash holdings follows an inverted U-shape, indicating a decline in cash holdings with greater market competition. Furthermore, our research demonstrates that the impact of market rivalry becomes more pronounced as cash holdings increase. State-owned enterprises benefit from reduced market competition, and firms with larger overall assets also experience a lesser impact. These findings have significant implications for managers, investors, and policymakers alike. Lastly, our study emphasizes the managerial implications of the uncertainty - R&D link, indicating that competition plays a crucial role in regulating this relationship, with specific dynamics varying depending on the size of the organization. [ABSTRACT FROM AUTHOR]

Insiders are known to trade when they believe their companies are undervalued and when they have access to confidential information regarding future cash flows. This paper investigates the impact of idiosyncratic risk on cash holdings using a dataset of Chinese-listed firms from 2008 to 2020; our empirical results reveal that cash holdings are positively correlated with idiosyncratic risk, and the mediation effect of investment is proved. We further investigate whether insiders at firms with high idiosyncratic risk (associated with financial irregularities and greater private information in prices) receive larger returns on their trades than insiders at companies with lower idiosyncratic risk based on these findings. We show that idiosyncratic risk enhances the profitability of corporate transactions (insider purchases and sales, as well as share repurchases). Corporate transactions are contrarian, and the magnitudes of returns before and after trades grow as idiosyncratic risk increases. In this study, we conduct empirical analysis in two parts. In the first phase, we look at how the level of discretionary idiosyncratic risk affects enterprises' cash holding strategy. In the second phase, we investigate the consequences for business investments of the link between discretionary idiosyncratic risk and 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]

Purpose: This paper provides new evidence on Indian tourism firms by investigating the role of a firm's financial conditions typified by its leverage, earnings, size, cash holdings, and excess cash in moderating the pandemic-led idiosyncratic volatility in its stock prices. Design/methodology/approach: The authors employ a firm-level panel comprising 82 publicly-listed tourism firms from India. Firm risk is estimated for the period beginning January 2020 to December 2020. Findings: This paper finds non-linear effects of the pandemic on the idiosyncratic risk of the sample firms. Precisely, stock price volatility rises, but as the market absorbs this information, volatility subsides even as the disease spreads further. Further, lower levels of past debt and earnings and higher cash holdings ameliorate the pandemic's effects on tourism firms' risk. Contrasting the view that "excess" cash reflects poor operational performance, we show that "excess" cash firms are better prepared to face the adverse effects of the pandemic. Research limitations/implications: This study's sample period fully encompasses the first wave of the pandemic (January–December 2020) of the novel coronavirus infection spread. Originality/value: To the best of the authors' knowledge, this is the first study to assess the moderating effects of company fundamentals on the risk of Indian tourism firms. In doing so, the authors account for non-linear effects of the pandemic on firms' idiosyncratic volatility over time. [ABSTRACT FROM AUTHOR]

This study investigates the impact of corporate social responsibility (CSR) strategy on corporate cash policy in emerging markets, with a specific focus on the COVID-19 pandemic period. By analysing data from 7,731 firm-years across 30 developing countries during the period 2002-2021, the study finds that CSR has a negative effect on cash holdings. In other words, firms with lower CSR investment tend to hold more cash. However, an interesting finding is that the negative impact of CSR on cash holdings lost its significance during the COVID-19 pandemic. This suggests that during this unprecedented period of economic uncertainty and disruption caused by the pandemic, firms with higher CSR were more inclined to hoard cash as a precautionary measure. In contrast, in normal times, the dominant motive for holding cash appears to be related to agency concerns. Furthermore, the study identifies countryspecific variations in the relationship between CSR and cash holdings. For instance, firms in Brazil and Saudi Arabia tend to use cash retention as a response to higher CSR, while firms in Argentina, Malaysia, Mexico, Poland, Taiwan, and Turkiye exhibit the opposite behaviour, using higher CSR as a signal for reduced cash holdings. Additionally, the study sheds light on industry-specific differences in the relationship between CSR and cash holdings. Beverage, construction and material, industrial material, oil, gas, and coal, technology hardware and equipment, telecommunications service provider, and travel and leisure firms are more likely to use cash holdings as a substitute for CSR, while alternative energy and media firms show the opposite pattern, using higher CSR as a signal for reduced cash holdings.

This study was conducted to determine the influence of corporate governance in manufacturing companies in determining cash holdings accompanied by financial performance as a control variable. Corporate governance is measured from board structures proxied by board size, independent board compositions, and board meetings; the audit committee proxied by the number of members and meetings; and ownership structures are proxied with institutional and managerial ownership. The data in the study were taken by purposive random sampling. The data in the study was processed and analysed using panel data regression analysis using Eviews 10 for the 2017-2021 research period. The results showed that, partially, board size and the independent board compositions have a positive and significant influence. Meanwhile, board meetings, audit committee members, audit committee meetings, institutional ownership and managerial ownership did not significantly influence.

The management of an entity faces diverse decisions concerned with corporate operations and financing choices. Investigating various factors affecting a company’s cash holdings provides valuable insights into the decision-making processes of an organization. This study examines the effect of Anti-Takeover Provisions (ATPs), Managerial Overconfidence, and their interaction on the level of an entity’s cash holdings. Conducting a regression analysis, this study examines 3,409 firm-year observations from Korean listed entities covering 2011 to 2018. Results reveal that anti-takeover provisions positively influence an entity’s cash holdings (coefficient = 0.464, t-stat value = 7.83). Additionally, managerial overconfidence negatively affects cash holdings (coefficient = –0.140, t-stat value = –2.77). Furthermore, the interaction between anti-takeover provisions and managerial overconfidence significantly influences cash holdings (coefficient = –0.402, t-stat value = –3.46), especially in firms employing specific provisions such as supermajority vote requirements for executive dismissal (coefficient = –0.445, t-stat value = –2.73), issuance of convertible preferred stock (coefficient = –0.341, t-stat value = –1.76), and golden parachutes (coefficient = –0.715, t-stat value = –3.02). This study provides empirical evidence on how anti-takeover provisions and managerial traits influence corporate cash reserves. The study offers valuable insights for regulators, investors, and corporate management. It also emphasizes prudent cash management, urging firms, especially those with anti-takeover provisions and overconfident management, to reconsider financial policies to mitigate risks associated with aggressive decision-making.

Firms in the Gulf region are predominantly governed by the entrepreneurial model where royal ownerships/management dominants. Using a Panel Regression Model in a sample of 202 firms across six countries in the Gulf Cooperating Council (GCC), this paper assesses the direct effect of corporate cash holdings on firms’ financial objectives or performance, and also how managerial entrenchments directly affect corporate cash holdings in GCC. It further tests the moderation and interaction effects of managerial entrenchments on the relationship between cash-holdings and firms’ financial performance. The research concludes that the effect of corporate cash holdings on firms’ performance is negative, especially for absolute and relatively liquidity firms. This proofs the U-shape hypothesis of cash holdings. Also, the results show that different managerial entrenchment variables have different effects on corporate financial performance or objectives. Furthermore, the moderation and interaction effects of managerial entrenchment on the relationship between cash holding and firms’ financial performance (i.e. ROA and ROE) are inconsistent. These findings show randomness in how managerial entrenchment affects firms’ performance in the GCC region. However, the interaction between cash and leverage is consistently positive on shareholders wealth (i.e. ROE) for all liquidity thresholds. This highlights the benefits of debts in corporate financing.

This study examines blockchain technology (BCT) firms’ ownership structure and cash holding (CH). Using GMM on a sample of firms indexed on Blockchain50 in China during 2009–2022, findings show that Largest-shareholders minimise CH, indicating corporate expansion. Due to their monitoring motive, Top10-shareholders allow corporations to maintain large cash. To prevent currency misuse, institutional ownership and CH are negatively related. Managerial ownership favours, while the chairman ownership lowers CH, supporting the interest alignment theory. Pre- and post-BCT index period analyses demonstrate a weak post-index period influence. The BCT adaptation lessens information asymmetry and aids in reducing agency issues through quick information flow, limiting owners’ influence. This study adds empirical evidence on ownership structure and CH. The study's findings may apply to developing market enterprises employing BCT's corporate governance structures.

AbstractThis investigation delves into the intricate connection between dividend policy and cash holdings, while considering the joint influence of the Environmental, Social, and Governance (ESG) ratings. Our aim was to acquire a profound comprehension of how ESG impacts cash-dividends link. The analysis encompasses cross-country data spanning from 2010 to 2020. The conclusions drawn from this study align with the notion that cash holdings and dividend policy share a positive correlation. Furthermore, this study shows a significant moderation of the relationship between cash holdings and dividend policies by ESG. In companies that adopt moderate ESG practices, there exists a noteworthy positive correlation between cash holdings and dividends. However, for companies that embrace comprehensive ESG processes, the opposite holds true. This study elucidates the impact of a company’s ESG policies on its dividend payout and cash reserves. Moreover, it furnishes invaluable insights that empower management and investors to make well-informed decisions and prospects, while duly considering the influence of ESG activities.

AbstractThis paper examines the impact of cash holdings and board governance characteristics on companies’ performance by Egyptian listed non-financial companies over the period 2013–2019. The researchers employed pooled ordinary least squares and two-step system GMM estimations to test their research hypotheses. Moreover, firm fixed-effects regression was conducted for robustness test. We found a significant positive impact of cash holdings, board size, board gender diversity (BGD), and board meeting frequency on companies’ performance, while board members independence is found to impact performance negatively and lead to less profits. Further, board members role duality is found to have no significant impact on Firm Performance. This paper holds potential implications for businesses based in Egypt, as well as for investors who operate within the Egyptian market, along with regulatory bodies in developing nations. The study findings contribute valuable insights to the literature on cash holdings and corporate governance. They enhance our understanding of how cash holdings and board of directors’ characteristics can influence a company’s profitability, particularly in the context of emerging markets. Additionally, the study’s focus on an emerging market provides new evidence that can be relevant to accounting researchers studying similar contextual and institutional environments in other emerging markets.

We examine the effects of equity ownership by exchange traded funds (ETFs) on corporate cash holdings. We find that firms increase their cash holdings in response to higher anticipated risks generated by ETFs. To establish a causal interpretation, we use the Russell 1000/2000 index reconstitution as an instrument for ETF ownership. We further show that shareholders place a higher value on the additional cash held by firms with higher ETF ownership. These findings are more pronounced among financially constrained firms. Overall, our results suggest that firms hold more precautionary cash to mitigate future funding needs due to higher ETF‐induced risks. [ABSTRACT FROM AUTHOR]

This study examines the effect of directors' and officers' liability insurance (D&O insurance) on corporate cash holdings in China. We propose a collusion theory in which D&O insurance can exacerbate the conflicts of interest between controlling and minority shareholders by shielding directors and officers from shareholder litigation in emerging countries. Consistent with our expectation, we find that insured firms tend to have high cash holdings that are appropriated by both controlling shareholders and directors/officers rather than being invested or paid to shareholders. Moreover, the positive relationship between D&O insurance and cash holdings is more pronounced in firms with high litigation risks, whereas the effect is attenuated in firms with political connections, strong external monitoring mechanisms and strong controlling shareholder power. Compared with uninsured firms, the market discounts the value of cash holdings for insured firms. [ABSTRACT FROM AUTHOR]

Objective Cash management policies have always been one of the most important financial policies in the process of managing companies. Considering the importance of cash management in companies and accounting standards, the presentation of the cash flow statement is considered one of the basic financial statements. Cash flows from operating activities indicate that the main and continuous operations and activities that generate the operating income of the commercial unit have led to sufficient cash flows to repay loans, maintain the operating capacity of the commercial unit, pay dividends, and make new investments. Various research has been conducted regarding the relationship between the sensitivity of cash holdings to cash flows. The results of some studies are also focused on the asymmetry of cash flows. However, investigating the effects of corporate governance mechanisms on the sensitivity of cash holdings under the condition of cash flow asymmetry is an issue that has not been investigated. Therefore, the purpose of this research is to investigate the sensitivity of cash holdings to asymmetric operational cash flows, considering the financial constraints and external supervision of institutional owners in companies listed on the Tehran Stock Exchange. Methods The statistical population consists of all the companies listed on the Tehran Stock Exchange during the Iranian calendar years 1393 to 1400 (2014 to 2022). The sample consists of 104 companies. To check the stationarity of the research variables, Levin, Lin, and Chu's unit root test was used, and to test the research hypotheses, the combined data regression method was utilized. Moreover, for the evaluation of the goodness of the proposed regression models, some necessary pretests were implemented. Results The findings show that companies with higher operating cash flows hold more cash. Financial constraints and institutional ownership do not have a significant effect on the sensitivity of cash holdings to asymmetric operating cash flows. Results from control variables also indicate that the Tobin ratio and the size of the company have a positive and significant effect on cash holdings. However, no evidence was found of a positive influence of the debt ratio on the amount of cash holdings. Conclusion Findings indicate that the sensitivity of cash holdings to asymmetric operating cash flows is higher in companies with greater operating cash flows. This result may be due to the pursuit of future profitable opportunities or to reduce liquidity risk in the inflationary, unstable, and dynamic business environment of Iran. Other results show that financial restrictions and institutional ownership, contrary to expectations and existing literature, do not have a significant effect on the sensitivity of cash holdings to asymmetric operating cash flows. This lack of effect may be attributed to the presence of state ownership. The results underscore the need for further research in the future. [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]

Maintaining an optimal level of liquidity remains a crucial agenda for firms to minimise liquidity risks. Therefore, the study aims to identify the drivers of liquidity by utilizing firm-level data of 1,544 microfinance institutions (MFIs), covering a total of 112 developing countries and a period of 2010–2018. The data were then analysed using conventional econometric tools and techniques. Among others, the study found that board size, portfolio quality, donations and size of MFIs have a positive effect on the liquidity of MFIs, while gender diversity at the board level, operational self-sustainability, staff productivity, legal status and gross domestic product (GDP) growth revealed a negative effect. After conducting several robustness checks, including alternative proxies, sub-samples and endogeneity-corrected techniques, our findings remain mostly consistent. Policy implications are further discussed. [ABSTRACT FROM AUTHOR]

The impact of a company's intangible assets on its market value has been a topic of great interest. Many studies have focused on various factors, such as industry, size, age, indebtedness, and profitability of companies, which influence decisions regarding the disclosure of information about intangible assets. This study examines the role of intangible assets in the valuation of a company's market value and takes into account other firm-specific characteristics. Our analysis was conducted on a sample of 50 publicly traded companies that are part of the EURO STOXX 50 index and come from eight countries in the eurozone: Belgium, Finland, France, the Netherlands, Ireland, Germany, Spain, and Italy. The study covered a five-year period from 2018 to 2022. The results of our study indicate that intangible assets have a significant impact on a company's market value. In conclusion, our study highlights the growing importance of intangible assets in today's economy and their significant influence on a company's market value. Investors can benefit from a deeper understanding of these factors, aiding them in investment decisions. For companies, the strategic management of intellectual assets is essential for long-term success. As the importance of intangible assets continues to rise, further research in this area is necessary to gain deeper insights into their impact on the business world. [ABSTRACT FROM AUTHOR]