Corporate Reputation Risk and Cash Holdings

Habib, A; Hasan, MM; Zhao, R

Corporate Reputation Risk and Cash Holdings

Habib, A Hasan, MM Zhao, R

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Publisher:: Wiley
Publication Type:: Journal Article
Citation:: Accounting and Finance, 2022, 62, (1), pp. 667-707
Issue Date:: 2022

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Field	Value	Language
dc.contributor.author	Habib, A
dc.contributor.author	Hasan, MM
dc.contributor.author	Zhao, R https://orcid.org/0000-0002-1223-3333
dc.date.accessioned	2022-03-16T01:56:48Z
dc.date.available	2022-03-16T01:56:48Z
dc.date.issued	2022
dc.identifier.citation	Accounting and Finance, 2022, 62, (1), pp. 667-707
dc.identifier.issn	0810-5391
dc.identifier.issn	1467-629X
dc.identifier.uri	http://hdl.handle.net/10453/155251
dc.description.abstract	We investigate the extent to which corporate reputation risk influences cash holdings for US listed firms over the period 2007–2018. Our results show that firms having a high reputation risk hold significantly more cash. This documented relationship persists even after controlling for other determinants of cash holdings, including corporate social responsibility performance, explicitly. Using a series of analyses, we show that this relationship is not driven by endogeneity problems. Further, we find that the positive relationship between reputation risk and cash holdings is more pronounced for firms with more financing constraints and agency problems, and for growth, mature and shake-out firms. In an additional test, we show that firms having a low reputation risk are associated with a higher marginal value of cash than are their high reputation risk counterparts. Overall, we provide robust evidence that reputation risk matters for corporate cash holdings.
dc.language	en
dc.publisher	Wiley
dc.relation.ispartof	Accounting and Finance
dc.relation.isbasedon	10.1111/acfi.12803
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1402 Applied Economics, 1501 Accounting, Auditing and Accountability, 1502 Banking, Finance and Investment
dc.subject.classification	Accounting
dc.title	Corporate Reputation Risk and Cash Holdings
dc.type	Journal Article
utslib.citation.volume	62
utslib.for	1402 Applied Economics
utslib.for	1501 Accounting, Auditing and Accountability
utslib.for	1502 Banking, Finance and Investment
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Finance Discipline
utslib.copyright.status	closed_access	*
pubs.consider-herdc	true
dc.date.updated	2022-03-16T01:56:47Z
pubs.issue	1
pubs.publication-status	Published
pubs.volume	62
utslib.citation.issue	1

Abstract:

We investigate the extent to which corporate reputation risk influences cash holdings for US listed firms over the period 2007–2018. Our results show that firms having a high reputation risk hold significantly more cash. This documented relationship persists even after controlling for other determinants of cash holdings, including corporate social responsibility performance, explicitly. Using a series of analyses, we show that this relationship is not driven by endogeneity problems. Further, we find that the positive relationship between reputation risk and cash holdings is more pronounced for firms with more financing constraints and agency problems, and for growth, mature and shake-out firms. In an additional test, we show that firms having a low reputation risk are associated with a higher marginal value of cash than are their high reputation risk counterparts. Overall, we provide robust evidence that reputation risk matters for corporate cash holdings.

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http://hdl.handle.net/10453/155251