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Corporate Social Responsibility Disclosure and the Value of Cash Holdings

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  • Louise Yi Lu
  • Greg Shailer
  • Yangxin Yu

Abstract

This study investigates whether corporate social responsibility (CSR) reports mitigate the value destruction associated with increases in cash holdings. We find that the issuance of a standalone CSR report increases the marginal value of cash holdings and this effect is more pronounced for firms in a less transparent information environment and for firms with weaker external monitoring. Our results suggest that information in CSR reports can facilitate monitoring and thus induce more efficient use of cash holdings.

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  • Louise Yi Lu & Greg Shailer & Yangxin Yu, 2017. "Corporate Social Responsibility Disclosure and the Value of Cash Holdings," European Accounting Review, Taylor & Francis Journals, vol. 26(4), pages 729-753, October.
    • Handle: RePEc:taf:euract:v:26:y:2017:i:4:p:729-753
    DOI: 10.1080/09638180.2016.1187074
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