The Effect of Corporate Cash Holding on Idiosyncratic Risk: Evidence from China
Authors
Yueting Cai1, a, †, Yunran Liu2, b,†, Xinyi Li3, c,†
1School of Economic and Management, Tsinghua University, China
2Department of Business and Management Studies, Lancaster University Management School, Lancaster University, Lancaster, LA1 4YW, UK
3School of Economic and Management, Beijing Forestry University, China
†
These authors contributed equally.
*Corresponding author. Email: acaiyt19@mails.tsinghua.edu.cn
Corresponding Author
Yueting Cai
Available Online 15 December 2021.
- DOI
- 10.2991/assehr.k.211209.261How to use a DOI?
- Keywords
- Cash holding; Corporate idiosyncratic risk; Corporate governance; Agency problem
- Abstract
We examine the effect of corporate cash holding on idiosyncratic risk. We find that corporate cash holding in China is positively associated with idiosyncratic risk. The association is robust to several robustness checks, including adopting an alternative method, fixed-effects model, and the inclusion of some possibly omitted variables. Further analyses demonstrate that the impact of corporate cash holding on idiosyncratic risk is more pronounced in firms that are non-SOEs, non-Big 4 auditors, having lower institutional shareholdings, and a lower growth rate. Our research enriches the role of corporate cash holding in corporate governance.
- Copyright
- © 2021 The Authors. Published by Atlantis Press International B.V.
- Open Access
- This is an open access article under the CC BY-NC license.
Cite this article
TY - CONF AU - Yueting Cai AU - Yunran Liu AU - Xinyi Li PY - 2021 DA - 2021/12/15 TI - The Effect of Corporate Cash Holding on Idiosyncratic Risk: Evidence from China BT - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021) PB - Atlantis Press SP - 1607 EP - 1617 SN - 2352-5428 UR - https://doi.org/10.2991/assehr.k.211209.261 DO - 10.2991/assehr.k.211209.261 ID - Cai2021 ER -