In this paper, we investigate the impact of government control on investors’ valuation of cash held by listed firms in China. We find strong and robust evidence that government control leads to a lower value of cash. Further evidence suggests that this negative impact is associated with...

We examine how firms change their cash policies in response to the downfall of corrupt politicians in China. We find that firms connected to their local government increase cash holdings when high-profile politician downfalls occur in the government. Consistent with the precautionary saving...

This study investigates how controlling shareholders fraudulently extracted firm value via cash tunnelling from Chinese companies from 1998 to 2011. The evidence suggests that expropriating owners choose a balance sheet account that is not directly related to the firm's operating business in...

We examine the effect of corporate ownership structure on the market value of excess cash in Chinese listed firms. We find that state ownership has a positive effect, as the market value of excess cash is greater in state-owned firms than in privately controlled firms. Furthermore, we show that...

In this study, we examine the impact of concentrated ownership on cash valuation and the level of cash holdings in firms the emerging nations of China and India. Agency theories suggest that firms with high levels of concentrated ownership are subject to greater extraction of private benefits...

Since its first occurance in January 2020 COVID-19 has spread globally. In order to contrain the COVID 19, China has adopted a zero-covid policy and consequently contributed to local economic crises in the form of slowed industry growth. Consequentily in the first Quarter of 2020, this crisis...

In 2012, China implemented a green credit policy (GCP) that restricts bank credits to heavily polluting firms. This paper examines how the GCP affects the cash holdings of Chinese listed firms. Using a difference-in-differences research design, we find that GCP-affected firms increase their cash...

We examine whether business groups’ influence on cash holdings depends on ownership. Group affiliation can increase firms’ agency costs or benefit firms by providing an internal capital market, especially in transition economies characterized by weak investor protection and difficult...

Employment protection increases labor adjustment costs and hence the expected costs of financial distress for labor-intensive firms. It follows that these firms are likely to increase their cash holdings to reduce the risk of financial distress when employment protection is strengthened....

This paper shows that agency problems result from controlling-minority shareholder conflicts have a nonlinear causal relation with firm cash holding, and this relation hinges critically on the strength of investor protection. Using a direct measure of controlling shareholder's entrenchment...