Do business groups affect corporate cash holdings? Evidence from a transition economy

Artikel

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 external capital acquisition. A hand-collected dataset of Chinese firms reveals that group affiliation decreases cash holdings, alleviating the free-cash-flow problem of agency costs. State ownership and control of listed firms moderate this benefit, which is more pronounced when the financial market is less liquid. Group affiliation facilitates related-party transactions, increases debt capacity and decreases investment-cash-flow sensitivity and overinvestment. In transitional economies, privately controlled firms are more likely to benefit from group affiliation than state-controlled firms propped up by the government.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: China Journal of Accounting Research ; ISSN: 1755-3091 ; Volume: 9 ; Year: 2016 ; Issue: 1 ; Pages: 1-24 ; Amsterdam: Elsevier

Klassifikation und Themen

• Klassifikation: Management ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance ; Corporate Finance and Governance: Government Policy and Regulation
• Thema: Business groups ; Cash holdings ; China ; State ownership ; Monetary policy

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Cai, Weixing ; Zeng, Cheng ; Lee, Edward ; Ozkan, Neslihan
• Ereignis: Veröffentlichung
• (wer): Elsevier
• (wo): Amsterdam
• (wann): 2016

Weitere Informationen

• DOI: doi:10.1016/j.cjar.2015.10.002
• Handle: http://hdl.handle.net/10419/187649
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ