The Relationship between Social Responsibility Disclosure and Cash Holdings

Iranian Journal of Accounting, Auditing and Finance

دوره 4، شماره 4، اسفند 2020، صفحه 57-70   

نوع مقاله: Original Article

شناسه دیجیتال (DOI): 10.22067/ijaaf.2021.39507

نویسنده

Naimeh Ghodsi Khamiri^*

Department of Accounting, Payame Noor University of Tehran. Tehran, Iran

چکیده

The present study investigates the relationship between social responsibility and cash holdings. The sample contains 770 firm years listed on the Tehran Stock Exchange from 2011 to 2017. The software used for statistical analysis is Stata 12, and the hypotheses were tested according to the multivariable linear regression test.  The results suggest a negative and significant relationship between social responsibility and cash holdings. Furthermore, the results indicate that corporate governance negatively affects cash holdings. In addition, the results show the relationship between unsystematic risk and cash holdings is positive.

کلیدواژه‌ها

Social Responsibility؛ Cash Holdings؛ Unsystematic Risk؛ Governance Score

مراجع

Acharya, V. Almeida, H. and Campello, M. (2013). Aggregate risk and the choice between cash and lines of credit. Journal of Finance, 68(5), 2059–2116. https://doi.org/10.1111/jofi.12056

Antoni, G. and Sacconi, L. (2011). Does a virtuous circle between social capital and CSR exist? A “network of CSR” model and some empirical evidence. Working paper, University of Trento, Italy.

Aoki, M. (2007). Linking economic and social-exchange games: From the community norm to CSR. SIEPR Discussion Paper No. 07-18, Stanford Institute for Economic Policy Research. https://link.springer.com/chapter/10.1057/9780230306189_6

Bates, T., Kahle, K. and Stulz, R. (2009). Why do U.S. firms hold so much more cash than they used to?. Journal of Finance, 64(5), 1985–2021. https://doi.org/10.1111/j.1540-6261.2009.01492.x

Beltratti, A. (2005). The complementarity between corporate governance and corporate social responsibility. The Geneva Paper, 30(3), 373–386. https://link.springer.com/article/10.1057/palgrave.gpp.2510035

Boubaker, S. Derouiche, I. and Nguyen, D. (2013). Does the board of directors affect cash holdings? A study of French listed firms. Journal of Management & Governance, 19(2), 341-370. https://link.springer.com/article/10.1007/s10997-013-9261-x

Cespa, G. and Cestone, G. (2007). Corporate social responsibility and managerial entrenchment. .Journal of Economics & Management Strategy, 16(3), 741–771. https://doi.org/10.1111/j.1530-9134.2007.00156.x

Chen, Q. Chen, X. Schipper, K. Xu, Y. and Xue, J. (2012). The sensitivity of corporate cash holdings to corporate governance. Review of Financial Studies, 25(12), 3610-3644. DOI: 10.2307/41678627

Cheung, A. (2016). Corporate social responsibility and corporate cash holdings. Journal of Corporate Finance, 37, 412-430.  https://doi.org/10.1016/j.jcorpfin.2016.01.008

Dittmar, A. and Mahrt-Smith, J. (2007). Corporate governance and the value of cash holdings. Journal of Financial Economics, 83(3), 599-634. https://doi.org/10.1016/j.jfineco.2005.12.006

Fabrizi, M. Malin, C. and Michelon, G. (2014). The role of CEO’s personal incentives in driving corporate social responsibility. Journal of Business Ethics, 124(2),  311-326.  https://link.springer.com/article/10.1007/s10551-013-1864-2

Fama, E.F. and French, K.R. (2007). Disagreement, tastes, and asset prices. Journal of Financial Economics, 83(3), 667-689.

Gao, R. and Grinstein, Y. (2014). Firms’ cash holdings, precautionary motives, and systematic uncertainty. From http://papers. ssrn. com/sol3/papers. Cfm abstract_id=2478349.

Godfrey, P. (2005). The relationship between corporate philanthropy and shareholder wealth: A risk management perspective. Academy of Management Review, 30(4), 777–98. DOI: 10.5465/AMR.2005.18378878

Gord, A. Mohammadi, M. and Golou Dost, M. (2014). Investigating the Relationship Between Corporate Governance and Cash Management Features. Accounting and Auditing Reviews, Tehran University Management College, 22(2), 263-278

Harford, J. Klasa, S. and Maxwell, W. (2014). Refinancing risk and cash holdings. Journal of Finance, 69(3), 975-1011. https://doi.org/10.1111/jofi.12133

Harford, J. Mansi, S.A. and Maxwell, W.F. (2008). Corporate Governance and Firm Cash Holdings. Journal of Financial Economics, 87(3), 535-555. https://doi.org/10.1016/j.jfineco.2007.04.002

Jensen, M.C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. American Economic Review, 76(2), 323–329. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=99580

Jiraporn, P. and Chintrakarn, P. (2013). How do powerful CEO’s view corporate social responsibility. Journal of Business Ethics, 119(3), 344-347. https://doi.org/10.1016/j.econlet.2013.03.026

Luo, X. and Bhattacharya, C. (2009). The debate over doing good: Corporate social performance, strategic marketing levers, and firm-idiosyncratic risk. Journal of Marketing, 73(6), 198–213. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2260348

Mikkelson, W. and Partch, M. (2003). Do Persistent Large Cash Reserves Hinder Performance?. Journal of Financial and Quantitative Analysis, 38(2), 275–294.  https://www.jstor.org/stable/4126751

Mishra, D.R. Sadok, E.L.  Guedhami, O. and Chuk, C.Y. (2011). Does Corporate Social Responsibility Affect the Cost of capital?. Journal of Banking & Finance, 35(9), 2388-2406. https://doi.org/10.1016/j.jbankfin.2011.02.007

Palazzo, D. (2012). Cash holdings, risk, and expected returns. Journal of Financial Economics, 104(1), 162–185. https://doi.org/10.1016/j.jfineco.2011.12.009

Russo, A. and Perrini, F. (2010). Investigating stakeholder theory and social capital: CSR in large firms and SMEs. Journal of Business Ethics, 91(2), 207–221. https://link.springer.com/article/10.1007/s10551-009-0079-z

Surroca, J. and Tribo, J. (2008). Managerial entrenchment and corporate social responsibility. Journal of Business Finance and Accounting, 35(5-6), 748-789. https://doi.org/10.1111/j.1468-5957.2008.02090.x

Yun, H. (2009). The choice of corporate liquidity and corporate governance. Review of Financial Studies, 22, 1447–1475. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=888423