Abstract
This study explores the relationship between corporate cash holdings and dual innovation performance within the context of Chinese A-share listed companies. The effective deployment of cash resources hinges on internal corporate controls, while the emergence of digital finance introduces crucial implications for corporate cash holding strategies. This paper empirically investigates the impact of cash holdings on innovation performance. The findings reveal that cash holdings exert a positive influence on overall innovation performance. Furthermore, the analysis demonstrates that cash holdings have a more pronounced effect on exploratory innovation as compared to exploitative innovation. This effect is positively moderated by internal control mechanisms, while the level of digital finance development plays an inverse moderating role. Heterogeneity analysis reveals that the positive impact of cash holdings on innovation is primarily observed in firms with relatively limited resources, higher propensity for innovation, and notable financing constraints.
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Xu, Y., Li, T., Liu, Z. et al. Does cash drive innovation? The relationship between cash holdings and firms' dual innovation performance. J. of Data, Inf. and Manag. 5, 267–280 (2023). https://doi.org/10.1007/s42488-023-00103-y
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DOI: https://doi.org/10.1007/s42488-023-00103-y