Does ESG Performance Enhance Corporate Cash Holding Value?
Journal: Modern Economics & Management Forum DOI: 10.32629/memf.v6i2.3962
Abstract
Given the critical role of cash holdings in corporate operations, examining the relationship between corporate ESG (Environmental, Social, and Governance) performance and the value of cash holdings helps elucidate how ESG practices enhance resource allocation efficiency and value creation. This study investigates the impact and mechanisms of ESG performance on cash holding value using a sample of Chinese A-share listed companies from 2009 to 2021. The findings indicate that superior ESG performance significantly enhances the value of corporate cash holdings. These conclusions contribute incremental evidence to the ESG-corporate value literature and offer practical insights for understanding the economic consequences of ESG initiatives and optimizing cash value management.
Keywords
ESG performance, cash holding value, agency problems, information transparency
Full Text
PDF - Viewed/Downloaded: 0 TimesReferences
[1] Tong Z, Huang H. Labor Unions and Corporate Cash Holdings: Evidence from International Data[J]. Journal of Financial Research, 2018, 41(3): 325-350.
[2] Drobetz W, Gruninger M C, Hirschvogl S. Information Asymmetry and the Value of Cash[J]. Journal of Bank & Finance, 2010, 34(9): 2168-2184.
[3] Lins K V, Servaes H, Tamayo A. Social Capital, Trust, and Firm Performance: the Value of Corporate Social Responsibility During the Financial Crisis[J]. The Journal of Finance, 2017, 72(4): 1785-1824.
[4] Porter M E, Kramer M R. The Link Between Competitive Advantage and Corporate Social Responsibility[J]. Harvard business review, 2006, 84(12): 78-92.
[5] Garcia A S, Orsato R J. Testing the Institutional Difference Hypothesis: a Study About Environmental, Social, Governance, and Financial Performance[J]. Business Strategy and the Environment, 2020, 29(8): 3261-3272.
[6] Atan R, Alam M M, Said J, et al. The Impacts of Environmental, Social, and Governance Factors on Firm Performance: Panel Study of Malaysian Companies[J]. Management of Environmental Quality, 2018, 29(2): 182-194.
[7] Li Y, Gong M, Zhang X Y, et al. The Impact of Environmental, Social, and Governance Disclosure on Firm Value: the Role of Ceo Power[J]. The British Accounting Review, 2018, 50(1): 60-75.
[8] Nollet J, Filis G, Mitrokostas E. Corporate Social Responsibility and Financial Performance: a Non-linear and Disaggregated Approach[J]. Economic Modelling, 2016, 52: 400-407.
[9] Dittmar A, Mahrt-Smith J. Corporate Governance and the Value of Cash Holdings [J]. Journal of Financial Economics, 2007, 83(3): 599-634.
[10] Huang P, Guo J, Ma T, et al. Does the Value of Cash Holdings Deteriorate or Improve with Material Weaknesses in Internal Control over Financial Reporting? [J] Journal of Banking & Finance, 2015, 54: 30-45.
[11] Max B E C. A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance[J]. The Academy of Management Review, 1995, 20(1): 92-117.
[12] Faulkender M, Wang R. Corporate Financial Policy and the Value of Cash[J]. The Journal of Finance, 2006, 61(4): 1957-1990.
[2] Drobetz W, Gruninger M C, Hirschvogl S. Information Asymmetry and the Value of Cash[J]. Journal of Bank & Finance, 2010, 34(9): 2168-2184.
[3] Lins K V, Servaes H, Tamayo A. Social Capital, Trust, and Firm Performance: the Value of Corporate Social Responsibility During the Financial Crisis[J]. The Journal of Finance, 2017, 72(4): 1785-1824.
[4] Porter M E, Kramer M R. The Link Between Competitive Advantage and Corporate Social Responsibility[J]. Harvard business review, 2006, 84(12): 78-92.
[5] Garcia A S, Orsato R J. Testing the Institutional Difference Hypothesis: a Study About Environmental, Social, Governance, and Financial Performance[J]. Business Strategy and the Environment, 2020, 29(8): 3261-3272.
[6] Atan R, Alam M M, Said J, et al. The Impacts of Environmental, Social, and Governance Factors on Firm Performance: Panel Study of Malaysian Companies[J]. Management of Environmental Quality, 2018, 29(2): 182-194.
[7] Li Y, Gong M, Zhang X Y, et al. The Impact of Environmental, Social, and Governance Disclosure on Firm Value: the Role of Ceo Power[J]. The British Accounting Review, 2018, 50(1): 60-75.
[8] Nollet J, Filis G, Mitrokostas E. Corporate Social Responsibility and Financial Performance: a Non-linear and Disaggregated Approach[J]. Economic Modelling, 2016, 52: 400-407.
[9] Dittmar A, Mahrt-Smith J. Corporate Governance and the Value of Cash Holdings [J]. Journal of Financial Economics, 2007, 83(3): 599-634.
[10] Huang P, Guo J, Ma T, et al. Does the Value of Cash Holdings Deteriorate or Improve with Material Weaknesses in Internal Control over Financial Reporting? [J] Journal of Banking & Finance, 2015, 54: 30-45.
[11] Max B E C. A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance[J]. The Academy of Management Review, 1995, 20(1): 92-117.
[12] Faulkender M, Wang R. Corporate Financial Policy and the Value of Cash[J]. The Journal of Finance, 2006, 61(4): 1957-1990.
Copyright © 2025 Menghui Zhu
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
