Chemical releases and corporate cash holdings

Henry He Huang, Chanjuan Liu and Li Sun

International Review of Financial Analysis, 2019, vol. 64, issue C, 159-173

Abstract: We examine the impact of a firm's chemical releases (an objective measure of environmental performance) on its cash holdings. The corporate social responsibility (precautionary) motive of cash holdings suggests a negative (positive) relation between chemical releases and cash holdings. Using a 27-year sample with 574 unique firms and 9748 observations, we find a significant and negative relation between chemical releases and cash holdings, suggesting that firms releasing more chemicals hold less cash. Our results are robust to changes analysis, instrumental variable two-stage regression, and other additional tests.

Keywords: Chemical releases; Cash holdings; Environmental Protection Agency (EPA); Toxics Release Inventory (TRI) (search for similar items in EconPapers)
JEL-codes: G30 G39 Q10 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521918308135
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:64:y:2019:i:c:p:159-173

DOI: 10.1016/j.irfa.2019.05.004

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().