摘要
Faultlines can affect a board of director’s effectiveness in supervising senior managers,which in turn affects the value of a company’s cash holdings.Based on sample data from Chinese A-share listed companies from 2004 to 2016,we examine the relationship between board faultlines and the value of cash holdings.The empirical results indicate that board faultlines have a significant inhibitory effect on cash holding value.This inhibitory effect is stronger for board faultlines resulting from deep-level attributes.Furthermore,the inhibitory effect of board faultlines is stronger in state-owned enterprises(SOEs)than in non-SOEs.As an important governance mechanism,management shareholdings can reduce agency costs and mitigate the negative impact of board fissures on cash holdings.Overall,we enrich the literature on the economic consequences of board faultlines and their influence on cash holding value.We also offer companies practical suggestions for improving the supervisory mechanism of their board of directors.
基金
the financial support of the National Natural Science Foundation of China(71872196,71402198)
the National Social Science Foundation of China(19ZDA098)
the MOE Project of Humanities and Social Sciences of China(19YJA790032)
the Beijing Social Foundation of China(15JGC176)
the support of the Program for Innovation Research of the Central University of Finance and Economics and the Graduate Student Research Grant awarded by the Graduate School of the Central University of Finance and Economics(20182Y005)
