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Research on the relationship of control level and corporate cash holdings: The moderating effect of property right

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Abstract

Cash holding is an important area of corporate financial management. Reasonable cash holding can help a company improve its competitiveness and development prospects. This paper examines the link between control level and cash holdings in different level intervals, and the regulating effect of ultimate controller characteristics on the relationship between control level and cash holdings. The results show that it is a nonlinear relationship between the control level and corporate cash holdings, which first decreases, then rises and then decreases. The nature of ultimate controller can enhance the relationship between the control level and cash holdings, and the negative correlation between control level and cash holdings is stronger in non-governmental control company than in governmental control company. The influence of control intensity on relationship decreases with the increase of control level. The study has certain reference significance for enterprises to optimize the level of cash holdings and improve the efficiency of resource allocation.

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Funding

Financial support of the research was provided by social science planning project (NO:2018YBGL064) from Chongqing Federation of Social Sciences and humanities and social sciences fund (NO: 18YJC880008) from ministry of education of China.

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Authors and Affiliations

  1. School of Economics and Business Administration, Chongqing University, 174 Shazheng Street, Shapingba District, Chongqing, China

    Xiao Hu & Bin Liu

  2. School of Economics and Business Administration, Chongqing University of Education, 9Xuefu Avenue, Nan’an District, Chongqing, China

    Zhenghua Deng

Authors
  1. Xiao Hu
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  2. Bin Liu
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  3. Zhenghua Deng
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Contributions

H.X. and L.B. conceived the idea; D.Z.H. conducted the analyses; all authors contributed to the writing and revisions. All authors read and approved the final manuscript.

Corresponding author

Correspondence to Xiao Hu.

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On behalf of all the authors, the corresponding author states that there is no conflict of interest.

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The datasets used or analysed during the current study are available from the corresponding author on reasonable request.

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Hu, X., Liu, B. & Deng, Z. Research on the relationship of control level and corporate cash holdings: The moderating effect of property right. Curr Psychol 41, 3760–3767 (2022). https://doi.org/10.1007/s12144-020-00876-0

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  • DOI: https://doi.org/10.1007/s12144-020-00876-0

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