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Government data opening and corporate cash holdings: Evidence from a quasi-natural experiment in China

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  • Liu, Huilong
  • Xie, Jing
  • Yang, Yanning

Abstract

We investigate whether government data opening reduces corporate cash holdings. Using the establishment of city-level open government data platforms in China as a quasi-natural experiment, we find that government data opening significantly reduces firms’ cash holdings. The effect is more pronounced when firm uncertainty is higher, when firms are more financially constrained, when firms are non-state-owned, when firms trade less in the internal market, and when there are fewer alternative information sources in a region. Overall, our evidence suggests that government data opening reduces environmental uncertainty and firms’ precautionary cash holdings.

Suggested Citation

  • Liu, Huilong & Xie, Jing & Yang, Yanning, 2024. "Government data opening and corporate cash holdings: Evidence from a quasi-natural experiment in China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1394-1414.
    • Handle: RePEc:eee:ecanpo:v:84:y:2024:i:c:p:1394-1414
    DOI: 10.1016/j.eap.2024.10.043
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    More about this item

    Keywords

    Government data opening; Cash holding;

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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