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- Title
Does economic policy uncertainty raise corporate precautionary cash holdings? Evidence from China.
- Authors
Xin Su; Shengshi Zhou; Rui Xue; Jinfang Tian
- Abstract
Using China as the research setting, this paper investigates the relationship between economic policy uncertainty and corporate precautionary cash holdings. Empirical results show a U-shaped relation between economic policy uncertainty and corporate precautionary cash holdings. Empirical analysis, in terms of ownership structure, firm size, corporate competitiveness and geographical location, further shows that (i) the effects for economic policy uncertainty in both state-owned and non-state-owned enterprises are significant, but the effect is stronger for state-owned enterprises; (ii) such significant effect is also found more strongly in small and medium-sized enterprises and highly competitive enterprises; and (iii) the effects for eastern, central and western China are all statistically significant, but the effect is strongest for eastern China.
- Subjects
CHINA; CASH position of corporations; ECONOMIC policy; SMALL business; UNCERTAINTY; GOVERNMENT business enterprises; BUSINESS size
- Publication
Accounting & Finance, 2020, Vol 60, Issue 5, p4567
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/acfi.12674