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CEO cultural background and corporate cash holdings

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  • Fai Lim Loi
  • Jean Jinghan Chen
  • Zhuo Qiao

Abstract

This paper examines whether the cultural background of chief executive officers (CEOs) affects corporate cash holdings. Using UK data from 2000 to 2018, we find that CEOs with a cultural background that emphasises power distance and uncertainty avoidance are positively associated with corporate cash holdings, while CEOs with a cultural background that emphasises masculinity are negatively associated with corporate cash holdings. Our results are robust to various robustness tests. Further analyses show that the impact is more pronounced when power is concentrated among top executives, when the CEOs have a degree of discretion in pursuing their own goals, and when information asymmetry is high.

Suggested Citation

  • Fai Lim Loi & Jean Jinghan Chen & Zhuo Qiao, 2023. "CEO cultural background and corporate cash holdings," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(S1), pages 1069-1100, April.
    • Handle: RePEc:bla:acctfi:v:63:y:2023:i:s1:p:1069-1100
    DOI: 10.1111/acfi.13019
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