National Culture and Corporate Cash Holdings Around the World

Chen, Yangyang and Dou, Paul Y. and Rhee, Ghon S and Truong, Cameron and Veeraraghavan, Madhu (2015) National Culture and Corporate Cash Holdings Around the World. Journal of Banking & Finance, 50. pp. 1-18.

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This paper examines whether cultural dimensions explain the variation in corporate cash holdings around the world as well as within the United States. We establish four major findings. First, in an international setting, corporate cash holdings are negatively associated with individualism and positively associated with uncertainty-avoidance. Second, individualism and uncertainty avoidance influence the precautionary motive for holding cash. Third, firms in individualistic states in the United States hold less cash than firms in collectivistic states. Fourth, we show that individualism is positively related to the firm’s capital expenditures, acquisitions, and repurchases while uncertainty avoidance is negatively related. Our findings remain unchanged after controlling for governance factors, firm attributes, and country characteristics.

Item Type: Article
Uncontrolled Keywords: Cash Holdings; National Culture; Individualism; Uncertainty Avoidance
Subjects: ?? Economics ??
Divisions: Finance and Strategy
Depositing User: Mr. Ramesh Kamath
Date Deposited: 11 Sep 2018 15:33
Last Modified: 26 Feb 2019 05:57

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