Author(s)

Wei Qiaoyin ¹

Affiliation(s)

¹ Guangxi University, Nanning, 530000, China

Corresponding Author

Wei Qiaoyin

ABSTRACT

In recent years, the phenomenon of the controlling shareholder having the same name as the listed company has had an important impact on the capital market and enterprise operation. This paper takes whether the names of the two are shared as the proxy indicator of the confidence commitment of the major shareholders, and examines the impact of the confidence confidence commitment on the cash holding level of the enterprise. The study found that: ① major shareholders confidence commitment is significantly negatively associated with the cash holding level of the enterprise; ② major shareholders confidence commitment mainly realized the decline of cash holding level by alleviating the financing constraints and reducing the preventive motivation and agency motivation of corporate cash holding; ③ major shareholders confidence commitment reduces the cash holding level and improves the value of the enterprise. This paper enriches the research on the economic consequences and influence mechanism of major shareholders confidence commitment, and expands the application scope of the motivation theory of enterprise cash holding.

KEYWORDS

Major shareholders can believe the commitment; enterprise cash holding; financing constraints; agency cost

CITE THIS PAPER

Wei Qiaoyin, Credible Commitments of Major Shareholders and Corporate Cash Holdings: Evidence from Listed Company Naming. Accounting and Corporate Management (2025) Vol. 7: 17-28. DOI: http://dx.doi.org/10.23977/acccm.2025.070103.

REFERENCES

[1] Xiao Tusheng, Sun Ruiqi, Yuan Chun. Research on the preventive value of enterprise cash holding under the impact of COVID-19 epidemic [J]. Economic management, and 2020, 42(04):175-191.DOI:10.19616/j.cnki.bmj. 2020.04.011.
[2] Xin Yu, Xu Liping. Factors affecting the cash holding level of listed companies: financial characteristics, shareholding structure and governance environment [J]. China Accounting Review, 2006, (02): 307-320.
[3] Lian Yujun, Su Zhi, Ding Zhiguo. Cash-cash flow sensitivity to test the financing constraint hypothesis?[J]. Statistical study, 2008,(10):92-99.DOI:10.19343/j.cnki.11-1302/c. 2008.10. 015.
[4] Li Changqing, Xing Wei, Li Maoliang. Controlling shareholder equity pledge and cash holding level: "hollowing out" or "to avoid the risk of control transfer" [J]. Finance and trade economy, 2018,39(04):82-98.DOI:10.19795/j.cnki.cn11-1166/f. 2018.04. 007.
[5] Kuang Xuewen, Peng Diyun, He Enliang. Research on the Market Value of cash holdings of Listed Companies in China—Empirical evidence based on financing constraint theory [J]. Journal of Shanxi University of Finance and Economics, 2009, 31 (12): 71-78.
[6] Liu Boyan, Han Liyan. Comparative Study on Liquidity Management of Chinese and American Listed Companies ——Based on industry characteristics of cash holding strategy [J]. Economic longitude, 2011,(05):145-150.DOI: 10.15931/j.cnki.1006-1096.2011.05.014.
[7] Xiong Lingyun, Jiang Yaoming, Lian Lishuai, etc. Leverage holding of controlling shareholders and enterprise cash holding [J]. The Industrial economy of China, 2020,(08):137-155.DOI:10.19581/j.cnki.ciejournal. 2020.08.008.
[8] Yang Xingquan, Yin Xingqiang. How does the mixed reform of state-owned enterprises affect the companys cash holdings?[J]. Managing the World, 2018, 34(11):93-107.DOI:10.19744/j.cnki.11-1235/f. 2018.0008.
[9] Zheng Peipei, Chen Shaohua. Managers overconfidence, internal control and corporate cash holding [J]. Management Science, 2018, 31 (04): 3-16. 
[10] Li Wenjing, Yan Jiayi. Who uses the internal capital market: enterprise collectivization degree and cash holding [J]. The Industrial economy of China, 2021, (06):137-154.DOI:10.19581/j.cnki.ciejournal. 2021.06.008.
[11] Bates T W, Kahle K M, Stulz R M. Why do US firms hold so much more cash than they used to?[J]. The journal of finance, 2009, 64(5): 1985-2021.
[12] Denis D J, Sibilkov V. Financial constraints, investment, and the value of cash holdings[J]. The Review of Financial Studies, 2010, 23(1): 247-269.
[13] Jensen M C. Agency costs of free cash flow, corporate finance and takeovers[J]. American Economic Review, 1986.
[14] Tadelis S. Whats in a Name?Reputation as a Tradeable Asset[J]. American Economic Review, 1999, 89(3): 548-563.
[15] McDevitt R C. "A" business by any other name: firm name choice as a signal of firm quality[J]. Journal of Political Economy, 2014, 122(4): 909-944.
[16] Cabral L M B. Stretching firm and brand reputation[J]. RAND Journal of Economics, 2000: 658-673.
[17] Choi J P. Patent litigation as an information-transmission mechanism[J]. American Economic Review, 1998: 1249-1263.
[18] Ingram P. Organizational form as a solution to the problem of credible commitment: The evolution of naming strategies among US hotel chains, 1896–1980[J]. Strategic management journal, 1996, 17(S1): 85-98.
[19] Opler T, Pinkowitz L, Stulz R, et al. The determinants and implications of corporate cash holdings[J]. Journal of financial economics, 1999, 52(1): 3-46.
[20] Belenzon S, Chatterji A K, Daley B. Eponymous entrepreneurs [J]. American Economic Review, 2017, 107(6): 1638-1655.
[21] Chen C, Song M, Truong C, et al. Naming as business strategy: an analysis of eponymy and debt contracting[J]. Review of Accounting Studies, 2024, 29(3): 2971-3017.
[22] Chen D, Li S, Xiao J Z, et al. The effect of government quality on corporate cash holdings[J]. Journal of Corporate Finance, 2014, 27: 384-400.
[23] Richardson S. Over-investment of free cash flow [J]. Review of accounting studies, 2006, 11: 159-189.

Sponsors, Associates, and Links

---

• Information Systems and Economics
  
  
• Accounting, Auditing and Finance
  
  
• Industrial Engineering and Innovation Management
  
  
• Tourism Management and Technology Economy
  
  
• Journal of Computational and Financial Econometrics
  
  
• Financial Engineering and Risk Management
  
  
• Social Security and Administration Management
  
  
• Population, Resources & Environmental Economics
  
  
• Statistics & Quantitative Economics
  
  
• Agricultural & Forestry Economics and Management
  
  
• Social Medicine and Health Management
  
  
• Land Resource Management
  
  
• Information, Library and Archival Science
  
  
• Journal of Human Resource Development
  
  
• Manufacturing and Service Operations Management
  
  
• Operational Research and Cybernetics