Corporate cash holdings under Sino-US trade conflict: evidence from China

Zhaohui Ke, Lihong Wang and Yujia Yin

Asia-Pacific Journal of Accounting & Economics, 2023, vol. 30, issue 2, 448-469

Abstract: This study examines the impact of Sino-US trade conflict on the corporate cash holdings of China’s listed foreign-trade companies with sanctioned US business. Employing a DID method, we utilize a sample of 207 foreign-trade companies with sanctioned US business and 832 foreign-trade companies without US business from 2016 to 2019. Our results show that Sino-US trade conflict has stimulated cash holdings in foreign-trade enterprises with sanctioned US business. A large amount of cash holdings exerts a positive effect on corporate performance, especially in poorly performing firms. This relationship is especially pronounced in enterprises with financing constraints and non-state-owned foreign-trade firms.

Date: 2023
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DOI: 10.1080/16081625.2021.1995887

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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