Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)

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.

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Volume Title
Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
Series
Advances in Economics, Business and Management Research
Publication Date
15 December 2021
ISBN
978-94-6239-483-4
ISSN
2352-5428
DOI
10.2991/assehr.k.211209.261How to use a DOI?
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  -