In this study, I observe the relation between firms with level of CSR performance and the value of cash holdings using a sample of 9,746 firm-year observations from 1994 to 2015. I examine this relation based on agency conflict view and find that the CSR firms have positive correlation with the value of cash holdings after controlling heteroskedasticity errors and autocorrelation by using generalized least squares (GLS) methodology and it is still necessary to do further study to prove. When I separately investigate the correlation of each components of CSR and the level of cash holdings, only corporate governance rating has positive impact on the cash reserves. Finally, for particular industries such as sinful firms and non-sinful firms, there is no significant evidence to confirm the impact of CSR activities on the value of cash holdings.
Publisher
Ulsan National Institute of Science and Technology (UNIST)