Academic Journal
Political culture and corporate cash holdings.
| Title: | Political culture and corporate cash holdings. |
|---|---|
| Authors: | Banks, Chih-Huei1 (AUTHOR), Hu, Huajing2 (AUTHOR), Platt, Katarzyna3 (AUTHOR) plattk@oldwestbury.edu |
| Source: | Journal of Economics & Finance. Sep2023, Vol. 47 Issue 3, p541-563. 23p. 11 Charts. |
| Abstract: | Do political beliefs matter for corporate cash-holding behavior? In this paper, we analyze whether the political preferences of managers affect their cash holdings. Using a composite political index to measure corporate political culture, we find that firms with Republican-leaning managers hold significantly less cash than firms managed by Democrats. We attribute the lower-level cash holdings of Republican firms to more conservative corporate policies, indicated by lower risk exposure, lower R&D expenditure, lower capital investment, and higher profitability. Our results survive various robustness tests, such as state-fixed effects and IV tests. [ABSTRACT FROM AUTHOR] |
| Subject Terms: | *Corporate culture, *Cash position of corporations, *Corporate governance, *Capital investments, *Risk exposure, Political culture |
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| ISSN: | 10550925 |
| DOI: | 10.1007/s12197-023-09636-9 |
| Database: | Business Source Complete |
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