Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Cash holdings and employee welfare
AU - Ghaly, Mohamed
AU - Anh Dang, Viet
AU - Stathopoulos, Konstantinos
PY - 2015/8
Y1 - 2015/8
N2 - This paper examines the relation between employee welfare practices and corporate cash holdings. We find firms that are strongly committed to employee well-being, measured by ratings on employee relations, to hold more cash. The effect of employee welfare standards on cash holdings is stronger for firms in human-capital-intensive, competitive, and high-labor-mobility industries in which employees are more important to their businesses. These results are consistent with the predictions of the stakeholder theory. Overall, our paper provides novel evidence on the role human capital and employee relations play in a firm's cash management policy.
AB - This paper examines the relation between employee welfare practices and corporate cash holdings. We find firms that are strongly committed to employee well-being, measured by ratings on employee relations, to hold more cash. The effect of employee welfare standards on cash holdings is stronger for firms in human-capital-intensive, competitive, and high-labor-mobility industries in which employees are more important to their businesses. These results are consistent with the predictions of the stakeholder theory. Overall, our paper provides novel evidence on the role human capital and employee relations play in a firm's cash management policy.
KW - Cash holdings
KW - Employee welfare
KW - Implicit claims
KW - Stakeholders
KW - Human capital
U2 - 10.1016/j.jcorpfin.2015.04.003
DO - 10.1016/j.jcorpfin.2015.04.003
M3 - Journal article
VL - 33
SP - 53
EP - 70
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
SN - 0929-1199
ER -