Anti-corruption, government intervention, and corporate cash holdings: Evidence from China

Xie, Jun; Zhang, Yifan

doi:10.1016/j.ecosys.2020.100745

Cited by 30 publications

(26 citation statements)

References 67 publications

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“…For example, the agency theory postulates that managers decisions to hold more cash to pursue their interests at the expense of shareholders (Jensen, 1986). Where firms with serious agency issues accrue cash even though they do not have good investment opportunities (Jensen, 1986;Pinkowitz, Stulz, & Williamson, 2006;Harford, Mansi, & Maxwell, 2008;Xie & Zhang, 2020). This could lead to irrational spending, reckless investment decisions, and a lower corporate value which increases the cash holding costs, known as agency costs (Marwick, Hasan, & Luo, 2020;Dimitropoulos et al, 2020).…”

Section: Cash Holdings and Theorymentioning

confidence: 99%

“…Over the past decades, there is a trend to considerably increase cash holdings by companies around the world (Dittmar, Mahrt-Smith, & Servaes, 2003;Bates, Kahle, & Stulz, 2009). Additionally, a growing literature followed this trend and aimed to investigate the determinants and consequences of firms' cash holdings (Xie & Zhang, 2020). Therefore, corporate cash holdings issues have attracted the attention of researchers and stakeholders, especially after the 2008 financial crisis.…”

Section: Introductionmentioning

confidence: 99%

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The Moderating Impact of Political Connections on the Relationship Between Cash Holdings and Firm Viability in Emerging Economies: Empirical evidence from Egypt

الشایب¹

2023

المجلة العلمیة للدراسات والبحوث المالیة والتجاریة

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The main purpose of this paper is to examine the impact of cash holdings on the viability of Egyptian listed firms. In addition, it investigates the moderating impact of political connections on the relationship between cash holdings and firm viability in the emerging market of Egypt. This study covers the period spanning 2014 to 2019. The results indicate that firms' cash holdings level has a significant positive impact on a firm's viability within Egyptian firms. Moreover, political connections variables after the Arab Revolution period were found to have no direct relationship with firms' viability. While the interaction between the first political connection measure; political connectivity and cash holdings have a significant negative impact on firm viability due to negative reactions from the market that tries to reduce corruption and improve its political environment. However, the interaction between cash holding and the second political connection measure; political strength, was found to have a significant positive impact on firm viability. This positive impact could be interpreted by using a different measure for political connection. Further, the increase in the number of politicians will support the good reputation of those firms in such period and its interaction with the cash would help improve firms' viability eventually. Cash holding might be a crucial mean of sustaining Egyptian firms' viability. This study provides useful managerial implications and contributes to the ongoing debate about the impact of cash holdings on corporate performance.

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Section: Cash Holdings and Theorymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Moderating Impact of Political Connections on the Relationship Between Cash Holdings and Firm Viability in Emerging Economies: Empirical evidence from Egypt

الشایب¹

2023

المجلة العلمیة للدراسات والبحوث المالیة والتجاریة

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“…The campaign also bolsters firm productivity, corporate social responsibility investments, and R&D expenditures (Gan and Xu 2019; Kong et al 2020, 2021). Firms tend to increase their cash holdings and acquire long‐term debts (Xu and Yano 2017; Xie and Zhang 2020) while governments increase subsidies to businesses (Fang et al 2019). On the other hand, Kim et al (2018) confirm that listed firms lose market value following news announcements about anti‐corruption investigations.…”

Section: Research On Current Anti‐corruption Policy In Chinamentioning

confidence: 99%

“…Hao et al (2020) Charitable donations from listed firms with strong political connections decline since the beginning of the anti-corruption campaign. Xie and Zhang (2020) The anti-corruption's intensity alleviates the positive relationship between government intervention and corporate cash holding. Kong et al (2021) The anti-corruption campaign substantially improves firms' corporate social responsibility performance.…”

Section: Authors Main Findingsmentioning

confidence: 99%

Corruption and anti‐corruption in China: a review and future research agenda

Tong

2021

Asian-Pac Economic Lit

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This paper systematically reviews the literature on corruption and anticorruption in China with a view to identifying opportunities for future research. We find that the research on corruption in China covered in existing literature is relatively narrow and theoretically insufficient. Specifically, studies mainly examine the corruption in firms, certain micro fields, and political fields; by contrast, studies on corruption in macro fields are scarce. In addition, extant studies on anti-corruption in China largely centre on examining the impact of the current anti-corruption campaign on firms, while analysis on the effects of anti-corruption policy actions by the Chinese government is inadequate.

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“…Data from the Corruption Eradication Commission of the Republic of Indonesia (KPK RI) shows that the private sector and echelon I / II / III officials have the highest ranking for corruption perpetrators from 2004 to 2017. In addition, the Anti-Corruption Behaviour Index (IPAK) published by the Central Statistics Agency To measure the level of public permissiveness towards corrupt behaviour, it shows that the public's understanding and assessment tends to be more idealistic in anti-corruption, but that society in practice when dealing with public services is still corrupt [6,7].…”

Section: Introductionmentioning

confidence: 99%

The Perspective of Corruption Risk Management Strategy in Indonesia

Harahap¹,

Syam²,

Akib³

et al. 2021

Proceedings of the 3rd Annual International Conference on Public and Business Administration (AICoBPA 2020)

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State problems have placed corruption as the enemy that most threatens the stability of the country. This can be seen from various countries experiencing the brink of destruction due to corruption by state officials. In fact, this official is expected to be a fortress capable of realizing the vision and mission of a country. Therefore, a strategy to deal with the risk of corruption is needed, especially in Indonesia, which is a developing country. The approach used is qualitative research in looking at the strategies carried out by government holders in the period 2004 to 2019. Data collection techniques use interview techniques and documentation. Data analysis uses interactive models developed by experts, namely: 1) Data Collection, 2) Data Display, 3) Data Condensation, 4) Conclusion: Drawing / Verifying (Miles, Huberman, Saldana, 2014). The results showed that the handling of the risk of corruption of the two government holders, namely the VI and VII Presidents, had increased. Moreover, the Government of the Seventh President experienced a significant increase. However, at the end of 2019 there was a decline in performance because the law underwent a very drastic change. The impact of these changes resulted in public distrust of the government, both legislative and executive, as an extension of the community's hands in the context of realizing a just and prosperous society as stated in the 1945 constitution of the Republic of Indonesia.

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Anti-corruption, government intervention, and corporate cash holdings: Evidence from China

Cited by 30 publications

References 67 publications

The Moderating Impact of Political Connections on the Relationship Between Cash Holdings and Firm Viability in Emerging Economies: Empirical evidence from Egypt

The Moderating Impact of Political Connections on the Relationship Between Cash Holdings and Firm Viability in Emerging Economies: Empirical evidence from Egypt

Corruption and anti‐corruption in China: a review and future research agenda

The Perspective of Corruption Risk Management Strategy in Indonesia

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