Do CEO's political promotion incentives influence the value of cash holdings: Evidence from state-owned enterprises in China

Lou, Xu; Qian, Aimin; Zhang, Chenyu

doi:10.1016/j.pacfin.2021.101617

Cited by 31 publications

(7 citation statements)

References 53 publications

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“…As per control variables, the results show that NWC and Debt have significantly negative effects, whereas OFC has a positive effect on the firm’s cash holdings in all the models, supporting the pecking order theory (Myers, 1984) and extant literature (Harford et al , 2008; Jebran et al , 2019; Lou et al , 2021). FAGE has a significantly positive association with cash holdings, indicating that old-aged firms hold more cash to avoid uncertainty in the future.…”

Section: Resultssupporting

confidence: 76%

FinTech and firm’s cash holdings: evidence from China

Ullah

Zeb

2023

DPRG

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Purpose This study aims to empirically explore the nexus between FinTech and a firm’s cash holdings. Design/methodology/approach A panel data regression analysis is conducted on a sample of A-listed firms registered on the Shenzhen and Shanghai Stock Exchanges from 2011 to 2019. To address simultaneity issues in the study, the authors use various endogeneity tests, including lag of independent variables, generalized method of moments and two-stage least squares estimation. Findings Results reveal that FinTech has a significantly negative effect on a firm’s cash holdings, suggesting that FinTech development improves cash management by alleviating agency costs and reducing financial constraints. The findings remain consistent across different FinTech measures and alternative cash holding proxies, demonstrating that FinTech serves as a corporate governance mechanism. Practical implications The findings suggest that FinTech disciplines corporate managers and alleviates agency problems regarding cash holdings. Originality/value This study suggests that FinTech determines a firm’s cash holdings.

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Section: Resultssupporting

confidence: 76%

FinTech and firm’s cash holdings: evidence from China

Ullah

Zeb

2023

DPRG

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“…Companies that have proven to have good reputations and historically have a record of profit growth from year to year and consistently provide dividends to investors; the stock price is relatively high, and the rate of return in the form of dividends is also worth it (Baker et al, 2001). Stock prices reflect investment decisions, funding (including dividend policy), and asset management (Lou et al, 2021). The firm's value can also be influenced by the size of the profitability generated by the firm.…”

Section: Introductionmentioning

confidence: 99%

The Regression Effect of Capital Structure and Firm Growth on the Firm value

Amin

2021

GRFM

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This study aims to determine and analyze the effects of capital structure, firm growth, and profitability on the firm value on the IDX. The population in this study were all manufacturing companies in the consumer goods industry sector, as many as 42 firms, and the number of samples was as many as 12 firms using the purposive sampling method. This study uses secondary data derived from the annual financial statements of manufacturing companies listed on the IDX. The data were analyzed using SPSS program. The results of this study indicate that capital structure and profitability have a negative and insignificant effect on the firm value on the IDX. The firm's growth has a positive and negligible impact on the firm value on the IDX. Trade Off Theory explains that if the position of the capital structure is below the optimal point, any additional debt will increase the firm's value. On the other hand, if the position of the capital structure is above the optimal threshold, any additional debt will reduce the firm's value. Statistically, the capital structure has a negative and insignificant effect on the firm value in the consumer goods industry sector listed on the IDX.

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“…Furthermore, in countries like China, state-owned firms tend also to accrue substantial non-financial resources since the government establishes a close relationship with them by appointing their top management. Consequently, these firms acquire advantages in terms of information access, procurement channels, and political legitimacy (Kou & Zang, 2014; Lou, Qian, & Zhang, 2021).…”

Section: Theoretical Background and Hypotheses Developmentmentioning

confidence: 99%

Constrained by Localized Attention Focus: The Negative Effect of Firm-Specific Knowledge on Exploratory Firm Innovation

Sullivan,

Mao,

Wang

2023

Manag. Organ. Rev.

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Integrating the resource-based view (RBV) and attention-based view (ABV), this study explores the impact of firm-specific knowledge (FSK) on a firm's exploratory innovation and the role of government support in this process. We argue that firms with a high degree of specificity in their knowledge assets tend to have a more localized attention focus, leading to those firms with less exposure to distant and diverse information and knowledge. Consequently, such firms are likely to have reduced exploratory innovative outputs. However, government resource support could expand a firm's attention focus beyond local searches, mitigating its negative effects. Based on a unique combined two-wave survey and archival data from over 500 firms in China, we find that the level of FSK is negatively related to a firm's exploratory innovation output. We provide evidence that localized attention focus partially mediates the negative effect of FSK on firms’ exploratory innovation. We further reveal that state ownership and state financial support for firm innovation weaken the negative main effect. This study makes important contributions to the literatures on the RBV, FSK, and firm innovation.

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Do CEO's political promotion incentives influence the value of cash holdings: Evidence from state-owned enterprises in China

Cited by 31 publications

References 53 publications

FinTech and firm’s cash holdings: evidence from China

FinTech and firm’s cash holdings: evidence from China

The Regression Effect of Capital Structure and Firm Growth on the Firm value

Constrained by Localized Attention Focus: The Negative Effect of Firm-Specific Knowledge on Exploratory Firm Innovation

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