Directorate interlocks and corporate cash holdings in emerging economies: Evidence from China
Hung-Gay Fung and
International Review of Economics & Finance, 2020, vol. 66, issue C, 244-260
The large amount of cash that some corporations hold has recently come under public scrutiny. Prior research has used the agency cost framework to explain why managers prefer large corporate cash holdings. Using a novel and intuitive approach, the resource-dependence perspective, we document that directorate interlocks, in terms of network centrality and structural holes that enable firms to have access to resources, affects firms’ cash holdings. Specifically, the directorate interlocks facilitate firms to have bank loans that substitute for cash holdings. We further show that political connection by the firm’s leader amplifies the directorate interlocks’ effect to reduce cash holding.
Keywords: Cash holdings; Network centrality; Structural holes; Bank loans; Political connection (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:66:y:2020:i:c:p:244-260
Access Statistics for this article
International Review of Economics & Finance is currently edited by H. Beladi and C. Chen
More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Haili He ().